A fifth of US-listed Chinese firms probably not qualified for a Hong Kong listing, narrowing escape options, research finds
- There are 52 Chinese companies listed in the US – including Renren and Waterdrop – which don’t qualify for Hong Kong listing
- The CMB Wing Lung team based their research on thresholds for the main listing methods on the Hong Kong stock exchange
About a fifth of the 261 Chinese companies currently listed in the US are probably not qualified to go public on the Hong Kong stock exchange, limiting the options for firms looking to offset the increased risk of a US delisting amid an ongoing auditing stand-off.
There are 52 Chinese companies listed in the US – including Renren, Waterdrop and Uxin – which do not currently qualify to go public in Hong Kong through a major listing approach, including a primary listing, secondary listing, dual primary listing and way of introduction, according to data provided to the Post by the equity research team at CMB Wing Lung Bank.
The CMB Wing Lung team based their research on thresholds for the main listing methods on the Hong Kong stock exchange, including market capitalisation, revenue, net profit and operating cash flow, and found that the 52 companies are currently unable to meet all the requirements.
A bank spokesperson said the research has not been verified, and was unauthorised for publication.
Under that law, foreign companies may be delisted if they fail to submit their audit papers to a US accounting oversight body (PCAOB) for three consecutive years. This means the three-year countdown for Alibaba to comply with the requirement has started.