Since the beginning of this year, the United States has accelerated its tightening of supervision of Chinese stocks listed in the list of , and Chinese stocks listed in the list of listed companies have fallen sharply. Although on August 26, the China Securities Regulatory Commission , the Ministry of Finance and PCAOB signed an audit supervision cooperation agreement, it is still the general trend that Chinese stocks listed in the future may seek diversified listing. The cause of the
incident can be traced back to December 2020. Trump signed the " Foreign Company Accountability Act ". According to regulations, foreign companies listed must submit documents to prove that they do not belong to and are not controlled by government organizations within the jurisdiction where they hire audit firm . In addition, the annual report must disclose the following information:
After the fastest 2022 fiscal year annual report is released and the slowest 2023 fiscal year annual report is released, Chinese stocks that cannot meet the conditions will be forced to delist. If the Accelerate Foreign Companies Accountability Act is passed, the transaction ban may be advanced until the 2022 fiscal year annual report is released. Therefore, many Chinese stocks listed in the United States have begun to explore listing options outside the United States.
List of Chinese stocks listed in the United States:
. Three stages of Chinese stocks listed in the United States.
Stage ①: 1990-1999. State-owned enterprises are privatized and reorganized. Chinese stocks listed overseas listed on the market have a single structure, mostly large state-owned enterprises and traditional enterprises. By listing in Hong Kong or New York, corporate governance standards are implemented and management infrastructure is established, corporate functions have been improved.
Stage ②: 2000-2011. The rapid development of Internet companies began to go public in the United States. At that time, the US market valued technology companies at a high level and recognized them very much. Sina , NetEase, Sohu , China Unicom , etc. are listed in the form of common stocks or ADRs.
Stage ③: 2021-2021. At the end of 2012, the China Securities Regulatory Commission issued the "Guidelines on the Copywriting and Review Procedures for the Overseas Issuance of Shares and Listing of Joint Stocks", abolishing many conditions for Chinese companies to go abroad to list and encouraging a large number of small and medium-sized enterprises to go abroad to list. Nearly 500 companies with an average market value of less than 5 billion yuan have successively achieved overseas financing.
After 2021, the number of Chinese companies listed in the United States has dropped sharply, and the United States has tightened its listing of Chinese stocks listed in the United States. Since March 2022, about 150 Chinese companies listed in the US have been included in the "pre-delisted list", and the market's expectations of accelerated supervision tightening have gradually strengthened.
2. The future trend of Chinese stocks listed in the United States.
Under the risk of delisting, Chinese stocks are nothing more than three results:
①No need to delist,
②listed in other regions,
③Privacy and other delisting.
. Path 2 pays more attention, but this involves revaluation of these companies, and also considers the impact of these companies on local market liquidity.
3. Distribution of medium probability market value.
From the perspective of market value distribution, Chinese stocks listed in the United States have a "dumbbell-shaped" distribution, and the unevenness of Chinese stocks listed in the United States is significantly greater than Hong Kong stocks . has many micro-stocks with circulating market value of below RMB 2 billion, and there are also many super-large stocks with circulating market value of more than RMB 100 billion; Hong Kong stocks also show a "dumbbell-shaped" distribution, but their unevenness is lower than that of Chinese stocks; A-share circulating market value shows a "N" distribution, with the peak number of companies concentrated in small and medium-cap stocks with 2-10 billion.
Many Chinese stocks listed below 2 billion were originally small and medium-sized stocks worth 5 billion or even 10 billion, and have been falling into micro stocks, such as New Oriental . On the other hand, it also shows that A shares has a higher tolerance for "scrap companies". Companies whose market value ranks below the 80% quantile account for about 6%, A-shares are around 26%, while Chinese stocks are only 3%.
Question ①: If these stocks are to be listed in Hong Kong and A-shares, they will inevitably involve the issue of revaluation.If the current valuation given by US stock is very low, it will inevitably lower the market's valuation of existing "junk companies".
Question ②: There are still many high-quality companies in Chinese stocks. Undervalued or reasonable valuation of these companies will inevitably absorb the already scarce liquidity of the market. Especially for Hong Kong stocks, liquidity is very limited when the Federal Reserve raises interest rates in and wants to maintain the exchange rate of Hong Kong dollar .
4. The possible impacts of the stock market in the future.
Impact ①: Passive reduction of holdings has caused a decline in Hong Kong stock prices. Chinese stocks listed in the United States are delisted, and some foreign investors cannot or are unwilling to hold A-shares or Hong Kong stocks, and will have to passively reduce their holdings. They may recognize Ali ,Bank is a good company, but they are unwilling to hold overseas stocks, so they have to sell them. Related ETFs and institutions will also reduce their holdings, causing pressure on the stock prices of Chinese stocks listed in the United States to be under pressure.
Effect ②: Short-term liquidity depletion. If a large number of Chinese stocks are concentrated and return, it will inevitably occupy the liquidity of A-shares and Hong Kong stocks, creating a blood-sucking effect. In 2022, the average daily trading volume of the main board of the Hong Kong Stock Exchange was only HK$128.4 billion. When the returned Chinese stocks diverted some funds and had a large basket of fish, there was even less water.
impact ③: The overall index fell. affects ①+ affects ②, which will inevitably lead to a decline in the overall index and at the same time drive the stock prices of other stocks to fall. But this is a good opportunity. The fundamentals of high-quality enterprises themselves remain unchanged. Now that a better price appears due to external reasons, it is worth being happy.
From past experience, from the perspective of the turnover rate of the Hong Kong Stock Exchange before and after the second listing in Hong Kong, the return of Chinese stocks may have a short-term impact on trading liquidity, but the market will still recover quickly and its popularity will become higher and higher.
impact ④: repurchase wave. companies that have been listed in the United States, Hong Kong and mainland China will repurchase them if they have sufficient cash. If the repurchase is cancelled in the future, it is equivalent to disguised dividends to shareholders. Of course, only capable companies will do this, and money-making companies cannot buy back.
In summary, if there is a probability of collective delisting or collective return in the future, it may have an impact on market liquidity. In the short term, the market will have downward pressure, but in the long term, it is a good opportunity to buy equity in high-quality companies at a reasonable price.
I wish you all a happy life.
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