Huatai Securities to list in London in China’s first depositary receipt via UK cross-border investment channel

The company said it aimed to raise US$500 million by floating up to 825 million global depositary receipts (GDR) under the Shanghai-London stock connect, which is anticipated to launch by the end of this year.

GDRs are part of a company’s shares transferred to a custodian bank before they are bought and traded by investors abroad.

Huatai said in a filing to the Shanghai Stock Exchange on Tuesday evening that the proceeds from the GDR offering would be used to enhance its capital base and bolster overseas expansion.

The announcement came one month after the China Securities Regulatory Commission (CSRC) unveiled rules governing the new cross-border trading system.

“The fundraising plan shows Huatai’s ambitions to internationalise its businesses,” said Zhou Ling, a fund manager with Shanghai Shiva Investment. “With GDRs traded in London, Chinese companies are not only eyeing investors, but also seeking to hone their global images.”

Huatai posted net profits of 9.28 billion yuan (US$1.35 billion) in 2017, the third most profitable brokerage on the mainland, trailing only Citic Securities and Guotai Junan Securities.