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Ant Group’s plan is just the spark that is needed to revive Chinese companies’ dual-listing ambitions
- Door for easier dual-listings has been reopened after an overhaul of rules by the Hong Kong and mainland’s stock exchanges
- Tsingtao Brewery blazed trail for dual listings in July 1993
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The high-stake share-offering plan by Ant Group is likely to revive a practice that was once popular among Chinese companies seeking to go public: dual-listings in the mainland and Hong Kong.
Hong Kong has been a vital fundraising avenue for mainland companies over the past three decades, helping major state-owned enterprises to access global money, foster better corporate governance and achieve faster growth. A total of 125 Chinese companies have dual listings.
The first company to opt for a dual-listing was Tsingtao Brewery, which started trading in Hong Kong in July 1993 after being revamped from a state-owned factory in the eastern city of Shandong. Since then, Tsingtao Brewery’s market cap has grown more than 100 fold to US$14.3 billion, making it the biggest beer brewery in the Asia-Pacific region. The listing was followed by a slew of medium-sized SOEs, including Shanghai Petrochemical and Yizheng Petrochemical.
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The mega dual-listings of the SOEs was extremely popular in the early 2000s, when the nation’s five biggest banks, including Industrial and Commercial Bank of China and China Construction Bank, raised billions of dollars from the stock flotations.
It was significant for both Hong Kong and Chinese companies. With the additions of the likes of ICBC and PetroChina, Hong Kong’s market has grown to the world’s fourth largest with a market cap of US$5.6 trillion. Meanwhile, the listings have elevated China’s major SOEs to be ranked among the world’s biggest companies now.
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