Insight – Beyond Didi: Watch these homecoming China stock listings in 2022

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WITH Didi Global Inc looking for a list in Hong Kong lower than a yr after its tumultuous debut in New York, traders are in search of different US-traded Chinese names that would doubtlessly provide shares nearer to residence amid regulatory pressures.

Such so-known as “homecomings” are a scorching matter in the Asian monetary hub as US authorities step up calls for over disclosures and Chinese officers search to reel in abroad choices citing safety considerations.

Listing in Hong Kong is seen as a substitute for corporations desirous to retain entry to world traders whereas being extra palatable to Beijing.

It can also be less complicated and faster than a mainland deal.

The regulatory threats imply firms with a complete market cap of virtually US$200bil (RM839bil) at present listed solely in the United States may have to hunt a return to Hong Kong or the mainland quickly, Bloomberg Intelligence analysts Matthew Kanterman and Tiffany Tam wrote in a notice.

An inventory compiled by Bloomberg News contains Pinduoduo Inc and Nio Inc among the many largest names.

Didi may file with the Hong Kong Stock Exchange round March, individuals with information of the matter have advised Bloomberg News.

People ride an electric tricycle past the headquarters of the Chinese ride-hailing service Didi in Beijing, China, December 3, 2021. REUTERS/Thomas PeterPeople experience an electrical tricycle previous the headquarters of the Chinese experience-hailing service Didi in Beijing, China, December 3, 2021. REUTERS/Thomas Peter

It is poised to affix over a dozen Chinese corporations which have already accomplished second listings in town after making world debuts by way of American depository receipts (ADRs), together with JD.com Inc. and Alibaba Group Holding Ltd.“Many of the big mutual funds are in the process of or have converted the majority of their ADR exposure into Hong Kong shares for stocks which are currently dual listed, suggesting a natural migration to Hong Kong is taking place,” stated Alex Abagian, co-head of Asia Pacific fairness capital markets at Morgan Stanley.

Below are the US-traded firms that would provide you with homecoming listings:

Pinduoduo

The e-commerce operator is the most important Chinese firm by market capitalisation listed solely in the United States.

Founded by Colin Huang, it has been one of many few main Internet giants to flee a direct hit from Beijing’s huge-ranging tech crackdown.

The agency’s ADRs rose to a report excessive in New York in February, however have slumped about 70% since amid a selloff in Chinese shares globally.

Nio

The electrical-automobile maker may very well be set to comply with friends XPeng Inc and Li Auto Inc, which launched second major listings in Hong Kong this yr.

Nio this month unveiled its second sedan, which is able to compete extra straight with Tesla Inc’s hottest Model 3.

Its ADRs are down about 50% from their February all-time excessive.

Didi China hailing cabDidi China hailing cab

KE Holdings Inc

The Beijing-based on-line housing platform was a goal of brief-vendor Muddy Waters Research this month.

KE stated the report is “without merit” and that it has authorised an inside overview of Muddy Waters’ key allegations.

The impression has been minimal on the ADRs, which had been already down greater than 70% from a report excessive in February.

Kanzhun Ltd

The Beijing-based proprietor of on-line recruitment platform Boss Zhipin surged in its US debut in June, and has managed to commerce nicely above itemizing value since then regardless of the volatility that has dominated Chinese names.

Its ADRs are up 73% since itemizing. Market cap US$13.5bil or RM57bil.

Tencent Music Entertainment Group

The music leisure firm, a rival to NetEase Inc’s Cloud Village Inc, debuted in New York over three years in the past.

The agency is nicely-positioned to seize a bit of the burgeoning US$800bil (RM3.4 trillion) metaverse market by way of its digital live performance enterprise, based on Bloomberg Intelligence.

Its ADRs have fallen 80% from a March peak to about half of their 2018 IPO value. Market cap US$11bil or RM46.1bil

Futu Holdings Ltd

The Chinese on-line brokerage is planning to file for a Hong Kong itemizing that would increase about US$1bil (RM4.2bil), IFR reported in October.

Its ADRs have fallen practically 80% from a February report excessive although they’re nonetheless buying and selling at about thrice their March 2019 IPO value. Market cap US$6bil or RM25.2bil.

IQiyi Inc

The video-leisure service operator has slumped over 80% since late March, hit by fears that Chinese tech giants could be kicked off US bourses.

The Baidu Inc subsidiary was stated to have picked banks for a Hong Kong second itemizing, based on a Bloomberg News report in October. Market cap US$3.9bil or RM16.4bil. — BloombergFilipe Pacheco and Pei Li write for Bloomberg. The views expressed listed here are the writers’ personal.



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