Zhonggai shares encountered “Black Thursday”.
On the evening of March 10, Beijing time, the US Securities and Exchange Commission (hereinafter referred to as “sec”) listed five Chinese enterprises as “relevant issuers” with delisting risk in accordance with the foreign company Accountability Act, including Baiji Shenzhou (06160. HK) (bgne. US) (688235. SH), yum China (09987. HK) (yumc. US), and Huang Pharmaceutical (00013. HK) (HCM. US) Zaiding medicine (09688. HK) (zlab. US) and ACMR (ACMR. US).
Affected by the news, the shares of the above five Chinese concept stocks in the United States fell by 5.87%, 10.94%, 6.53%, 9.02% and 22.05% respectively.
“Cold lips and cold teeth”, and other China concept stocks that were not listed also felt cool. Alibaba (09988. HK) (Baba. US) fell 7.94%, pinduoduo (PDD. US) fell 17.49% and JD (09618. HK) (JD. US)
Down 15.83%.
The SEC’s “step-by-step pressure” makes the return of China concept shares on the table again. At the beginning of 2021, China concept stocks such as Baidu, station B and microblog have staged a “tide of returning to Hong Kong”, but now it is different from the past.
On March 11, the Hang Seng technology index fell by more than 8%, the largest one-day decline since the index was launched on July 27, 2020. As of the closing of the day, the Hang Seng technology index fell 4.28% and the Hang Seng Index fell 1.61%, 34.09% lower than the high of 3118336 in early 2021.
Puyin international pointed out that the short selling position of Hong Kong stocks is at an all-time high, the market sentiment has dropped to the freezing point, and the market sentiment is extremely pessimistic. In terms of capital, the current capital outflow rate of Hong Kong stocks is similar to that in 2008, second only to that during the Asian financial crisis in 1998.
However, Hong Kong, China, made it clear in February this year that it was ready to welcome the return of China concept shares.
On the morning of March 11, times finance sent an interview email to the Hong Kong Stock Exchange on relevant issues, but as of the time of publication, no reply had been received.
Five enterprises were pulled to the “list”
Among the five Chinese enterprises on the “list”, there are three innovative pharmaceutical enterprises, Baiji Shenzhou, Hehuang pharmaceutical and zaiding pharmaceutical; ACMR, a semiconductor enterprise, and Yum group, a catering enterprise.
However, these five companies do not rely solely on the “one leg” of U.S. stocks: Baiji Shenzhou has realized the listing of U.S. stocks, Hong Kong stocks and a shares; Hehuang pharmaceutical, zaiding pharmaceutical and Parkson China are listed on us and Hong Kong stocks; ACMR has a holding company shengmei Shanghai in a shares.
On March 11, the above five companies issued announcements to clarify the impact of the incident, but the focus was slightly different.
Baiji Shenzhou said that the company has been actively seeking solutions, has met the relevant laws of the United States, and looks forward to maintaining its listing status in the three places. Its statement highlights the advantages of listing in the three places and tries to enhance investor confidence.
Zaiding pharmaceutical said that the incident was within the company’s expectation. With the submission of annual reports by companies, more companies will be added to the provisional list of the US SEC in the future. Moreover, zaiding pharmaceutical is the only independent certified public accounting firm among the four companies that responded to the impact of the incident, which clearly indicated that it can meet the review requirements of PCAOB, and completed this compliance requirement within three years specified in the act.
The so-called “PCAOB” is the US auditor regulator. One of the core contents of the foreign company Accountability Act is to prohibit transactions without the inspection of the US auditor regulator PCAOB within three years.
Yum China’s reply first indicated that unless the act is amended, the company is excluded or PCAOB can complete the comprehensive verification of the company’s auditors within the specified time, the company’s common shares will be delisted from the NYSE in early 2024. Then Yum China said that the company had completed its secondary listing in Hong Kong on September 10, 2020, and the shares of the Hong Kong stock exchange could be exchanged with the shares of the New York Stock Exchange. Its reply pointed out the characteristics of its dual listing, trying to reduce the adverse impact.
ACMR’s holding company, shengmei Shanghai (688082. SH), announced in its A-share announcement that ACMR is committed to meeting the requirements of the US SEC by the deadline of 2024, and said that this event will not affect the equity stability and production and operation of shengmei Shanghai. On March 11, times finance repeatedly called shengmei Shanghai Securities Department, but the phone was not connected.
In addition, the four companies mentioned that the listing would not be affected until 2024, when they failed to meet the compliance requirements of the SEC for three consecutive years.
Hehuang pharmaceutical was the last one to issue an announcement, but the content did not involve whether the company should take some measures to avoid delisting. It only said that the company would continue to pay attention to market development and evaluate all strategic options.
On March 11, times finance contacted Huang pharmaceutical, and its media head said it was inconvenient to reply to relevant questions.
From the replies and statements of the five companies, the company has expected the occurrence of the event and has been coordinating through all aspects. Due to the listing of the two or even three places, the company’s financing and liquidity in the capital market are also guaranteed to a certain extent. At present, the companies are still waiting for the development of the market.
Hong Kong stocks become a value depression
The “initiator” of this incident is the so-called “foreign company Accountability Act”, which was passed by the U.S. Congress in 2020. At the end of 2021, the SEC passed the amendment to the act and determined the implementation details.
As the bill also involves sensitive issues such as the equity relationship between the relevant government and enterprises, the bill is considered to be set for Chinese enterprises. Under the background of relatively unstable Sino US relations, the number of enterprises listed in the United States has also decreased significantly.
According to Deloitte’s report, in the second half of 2021, only three Chinese enterprises were listed in the United States, and the number and amount of IPO Financing accounted for only 8% and 3% of the total number of the whole year.
On March 11, a large Chinese securities trader told times finance that in the current environment, the cost performance of listing in the United States is very low, not only the valuation is killed very low, financing is also very difficult, but also disturbed by some market factors. “For the current China concept stocks, investors are too pessimistic. After all, most excellent China concept stocks are listed in Hong Kong. In fact, the problem is not big.”
At the same time, DENGO, a senior investment adviser, told times finance, “it takes a long time for zhonggai shares to return to A. returning to Hong Kong is a compromise choice. Hong Kong’s capital market system is more perfect and more suitable for the long-term development of zhonggai enterprises.”
However, since February 2021, the Hang Seng Index has been falling since it reached a new high in the previous year and has been bottoming all the way. On March 11 this year, it fell to a new low.
At the same time, the innovation of Hong Kong stocks has also entered a “cold winter”. Netease cloud, microblog and other new shares with high attention experienced breaking on the first day of listing. According to statistics, among the 28 new shares listed on the Hong Kong Stock Exchange since August 2021, 21 new shares broke on the first day, with a breaking rate of 75%.
In view of the current performance of the Hong Kong stock market, Puyin international pointed out that the short selling position of Hong Kong stocks is at an all-time high, the market sentiment has dropped to the freezing point, and the market sentiment is extremely pessimistic. In terms of capital, the current capital outflow rate of Hong Kong stocks is similar to that of the 2008 financial crisis, second only to that of the Asian financial crisis in 1998.
The above-mentioned securities traders told times finance that Hong Kong stocks should be at the lowest valuation since the subprime mortgage crisis. The P / E ratio and P / B ratio are constantly at a record low, which is very rare in the history of Hong Kong stocks and in the financial markets all over the world.
Although the market environment is not good, it believes that Hong Kong stocks cannot maintain such a position for a long time. “The performance of Hong Kong stocks, especially technology stocks, is affected by several factors: first, the policy factors of antitrust and preventing capital from expanding; second, the performance of technology giants such as Alibaba and Tencent began to show signs of turning around; third, the fluctuation of market sentiment caused by the Fed’s interest rate hike.”
Hong Kong has already expressed its attitude towards the “home” of zhonggai shares. Chen maobo, the financial secretary of Hong Kong, China, mentioned in the budget that companies that do not have different voting structures and belong to non Chuang Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) will be allowed to be listed in Hong Kong for the second time, and issuers with Dual Major listing will be given greater flexibility.
On the morning of March 11, time finance sent an interview email to the Hong Kong Stock Exchange about the five companies being included in the provisional list of “relevant issuers” with delisting risk by the SEC, but no reply had been received as of the time of publication.
According to people close to regulators, the consultation between Chinese and American regulators on audit supervision cooperation is relatively smooth, and it is expected to reach a consensus as soon as possible.
