Will the introduction of dual-class shares in Hong Kong boost Chinese tech shares listed in US?
As Hong Kong prepares to launch weighted voting rights, industry insiders debate their effect on valuations of Chinese companies’ American depositary receipts
The introduction of dual-class technology stock listings on the Hong Kong stock exchange is likely to
narrow the valuation gap between Chinese and US technology stocks listed in the United States, says the chief executive of exchange-traded fund manager Enhanced Investment Products.
Tobias Bland said that thanks to the impending launch of the weighted voting right governance structure by Hong Kong Exchanges and Clearing, he expected several Chinese technology “marquee players” – smartphone giant Xiaomi as well as leading fintech players Lufax and Ant Financial – and Ping An Good Doctor to list with Hong Kong as their primary market.
Weighted voting rights will also lead to dual listings in Hong Kong by technology companies that are already listed in the US as American depositary receipts, he said. Together, the growing number of technology stocks in Hong Kong will mean that the price-to-earnings multiples of Chinese technology American depositary receipts – and their respective share prices – would be due for an upgrade, said Bland.
The weighted voting rights structure, which is still not allowed by Chinese regulators, will also incentivise more Chinese technology companies to list in Hong Kong, industry players have long said.
