Five Chinese State-Backed Giants to Delist in US; Other Countries’ Bourses Beckon, Insiders Say
Zhou Ailin
DATE:  Aug 15 2022
/ SOURCE:  Yicai
Five Chinese State-Backed Giants to Delist in US; Other Countries’ Bourses Beckon, Insiders Say Five Chinese State-Backed Giants to Delist in US; Other Countries’ Bourses Beckon, Insiders Say

(Yicai Global) Aug. 15 -- Energy colossus PetroChina and four other Chinese state-owned enterprises have filed to delist from the New York stock exchange, the five firms said in separate statements on the same day last week. But there are plenty of other offshore listing options elsewhere, industry insiders said.

Oil major China Petroleum & Chemical, better known as Sinopec, aluminum behemoth Aluminum Corp. of China, also known as Chalco, insurance giant China Life Insurance and petrochemical refiner Sinopec Shanghai Petrochemical are the other four who applied to quit the New York bourse on Aug. 12.

It is expensive for these companies to maintain their dual listings on both the mainland and in the US, so the decision to exit the US is not unreasonable, insiders said.

The five firms’ mainland-traded shares are doing much better than those in the US, according to Bloomberg data. In the past thirty days, for instance, the average trading volume of Sinopec’s stock in the US was 17 million shares, while that on the mainland was around 78 million.

More and more Chinese firms are turning to other overseas markets for their offshore listings under increased US scrutiny of their accounting practices.

And more options are becoming available. China’s securities regulator extended the mainland’s stock connect programs with other countries’ bourses to include Switzerland and Germany in February. The Shanghai-London stock connect mechanism was set up in 2019 and the one between Hong Kong and the mainland has been operating for many years.

Electric car battery manufacturer Gotion High-Tech, machinery maker Keda Industrial Group, and two battery raw materials suppliers Ningbo Shanshan and Gem were the first mainland-listed firms to issue global depositary receipts on the SIX Swiss Exchange once the new scheme was launched at the end of last month.

There are also several other combinations. In May, electric car startup Nio became the world’s first auto manufacturer to complete the triple whammy of being listed on three bourses and the first Chinese company to go public in Hong Kong, Singapore and New York.

Many other companies are studying this model as even if they come off the US exchange, they can still have a primary listing in either Hong Kong or Singapore and maintain a secondary listing in the other, Chia Caihan, chief representative of the Beijing office of the Singapore bourse, told Yicai Global.

Editors: Dou Shicong, Kim Taylor

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Keywords:   Cross-Border Listing,US,Delisting