Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 9, 2021.
Brendan McDermid | Reuters
BEIJING – The US-listed Chinese stocks with the largest share of American ownership do not include many big names familiar with Wall Street, Morgan Stanley reports.
Increased political pressure from both Beijing and Washington means many Chinese companies may need to delist from the US and moved to Hong Kong.
But most of the affected stocks have low U.S. ownership, according to a Morgan Stanley report published on Dec. 9. And even the more money-making U.S. stocks don’t include those. famous names like Alibaba.
Here is the list:
The top five names on the list by US ownership include biotech companies BeiGene and Zai Lab, KFC-parent Chinese Yum and dating app operator Hello group. Fifth name, FUN, is a live streaming company formerly known as YY.
According to CNBC calculations of Morgan Stanley data for stocks that qualify for a secondary listing in Hong Kong, the average ownership rate of the top 10 names in the US is 43%. The average of the top 50 names is 27%.
This figure of Alibaba is much lower than 13.1%, while the Chinese electric car start-up Nio had a slightly higher market share at 20.4%, the report said.
Swap for shares listed in Hong Kong
Chinese companies such as Alibaba, Trip.com and Baidu have held secondary stock offerings in Hong Kong over the past few years. That means if US-listed shares are delisted, investors can swap them for shares in Hong Kong.
Other companies, such as Nio and video streaming site iQiyi, are immediately eligible to go public in Hong Kong, Morgan Stanley reports.
But the report found that more than 40 Chinese stocks listed in the US will not be able to list in Hong Kong in the next two years because they do not meet the exchange’s requirements for market value, profitability and other indicators. Others.
Below are US ownership of some stocks with a market value greater than $1 billion that are not eligible for listing in Hong Kong:
In recent months, the Chinese government has made it more difficult for local companies to list in the US by requiring a further review of data security.
Just days after its US IPO in late June, Chinese ride-hailing app Didi had to suspend new user registrations for government review. In the first day of this month, The company said it would delist it from the New York Stock Exchange and listed in Hong Kong.
Morgan Stanley did not include Didi in its report.
Meanwhile, pressure on Chinese stocks is increasing from the US side. US Securities and Exchange Commission earlier this month completed the preliminary procedures needed to initiate the delisting process of Chinese stocks that do not authorize the US government to audit financial statements for three consecutive years.
However, Morgan Stanley analysts don’t expect the forced sell-off to come until at least 2024.
Institutions or non-US investors will be more affected by such changes. US retail investors account for only about 13% of US trading volume for Chinese stocks listed there, Morgan Stanley analysts estimate.
