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Does China hope that technology companies will return to the A-share CDR will be the answer?

via:网易科技     time:2018/3/15 8:15:09     readed:734

1. why is China keen to bring back overseas listed companies?

China has born some of the fastest growing technology companies in the world, but mainland investors have been unable to enjoy the bonus easily. Alibaba group, Baidu and other well-known Internet Co are generally listed in the overseas market, while the Chinese capital market is full of ancient state-owned enterprises.

2. what is the certificate of China's depository?

No one is sure. Although it has been discussed for more than 10 years, it has never been a reality, without any of the provisions of the book that will allow them to take effect immediately. In the world, depository vouchers are proxy securities that allow domestic investors to hold overseas stocks. For example, American Depository Receipts (ADR) package overseas stock and sell on US stock exchange, which is priced in US dollars, and its underlying securities are held by overseas financial institutions.

3. why did Chinese companies run overseas to go on the market?

The reasons include: exposure to global institutional investors, listing on Wall Street can bring prestige, and can touch the international bond market without having to deal with China's capital controls. In addition, many Chinese technology companies use an enterprise structure called VIE (variable interest entity), which is not allowed in mainland China. Such a structure with the same rights and different rights is not allowed. Such structure can give the founder a great control over the company, and is also favored by Alibaba and other companies.

What will the 4. return to the country look like?

The details are not clear, but it may be listed on the international market (such as Hongkong or New York) for the first time, and the CDR structure will be used for the two time in the mainland of China. Another option proposed by the general manager of the Shenzhen stock exchange, Wang Jianjun, at the National People's Congress meeting, is to allow the establishment of a different rights structure in China. That would allow more companies to go public at the same time in Hongkong and Mainland China - about 250 companies have already done this, including Tsingtao Brewery.

5. what are the obstacles to the 5. CDR?

There are many unresolved problems in the consulting company EY, Keith, Pogson, a senior partner of Asian financial services, such as currency denomination, capital control and compliance of corporate governance requirements. For example, according to China's regulations, the board meeting must be carried out in Putonghua; there is no clear solution for international companies with CDR. CDR, the Chinese strategic director of UBS, said that it would be incompatible with the current law and that any new laws and regulations need to be introduced slowly.

6. China Science and technology companies want to go on the market in China?

The Chinese stock market traded on an average of $73 billion a day, while Hongkong traded an average of $13 billion a day. Boan, founder of the China Renaissance partnership, points out that it is a huge new pool for businesses. The investment company has promoted some large-scale technological transactions in China. He said that many companies in the industry are eager to be listed in a way home, and point out that this will also enhance the brand awareness of the enterprise.

What does the 7. China plan mean to Hongkong?

It depends on when and how the Chinese continent changes its rules. Hongkong will soon be allowed to list the companies with different rights structure. The aim is to attract Chinese technology giants, but if the domestic listing becomes a viable option, the strategy may be threatened. Secondly, Chinese technology companies can share the same rights with different structures in Hongkong, and at the same time, a mode of listing in mainland China -- a choice being considered by Xiaomi company -- will be beneficial to Hongkong.

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