(Yicai Global) July 20 -- Many Chinese listed companies still wish to have a secondary listing on UK or European stock exchanges, despite China’s securities regulator tightening regulations in May.

Twenty Chinese companies have gone public on UK or European bourses so far, five of which listed on the London Stock Exchange and 15 on the SIX Swiss Exchange, according to data from corporate information platform Wind.

And thirty-six are still in the pipeline, waiting for regulatory approval, while six have cancelled their plans.

Most of these companies, at 37.5 percent, are in the field of power equipment, Wind said. There are 16 that have already gone public and another eight in the pipeline. Other sectors that are well represented are medicine and machinery.

By listing in Europe, Chinese companies can improve their image and attract more investors, Xu Hong, a partner of Linklaters, said at the Shenzhen Stock Exchange’s 2023 Global Investors Conference early last month.

Of the six that pulled out, five of them did so last month, after the China Securities Regulatory Commission said that those companies that wish to issue global depository receipts must still comply with domestic refinancing requirements.

This gave the signal that firms must use the money raised from secondary listings abroad in their primary businesses and meet requirements for business positionings and development overseas, Xu said.

Overseas bourses and regulators are happy to see better communication between investors and regulators, Xu said. The guidelines also require GDR issuers to be compliant in information disclosure not only before going public but also afterwards.

Editors: Tang Shihua, Kim Taylor