Many mainland enterprises flocked to Hong Kong for listing and financing at the end of the year

Hong Kong has become the first choice for overseas financing

Following the simultaneous issuance of 5 new shares last Thursday, the Hong Kong Stock Exchange continued to "set a new high" last Friday - 6 new shares including Everbright Bank H shares, Fuguiniao, Creative Home, Longguang Real Estate, Dongjiang Group and Sicheng were all listed on the same day. Except for the first Hong Kong listed architect building, the others are all from the mainland, involving banking, real estate, leather shoes, home furnishing and injection molding industries.

It is understood that in the past, the Hong Kong Stock Exchange usually issued a maximum of 4 new shares in one morning, and two big gongs and four companies were just enough. However, the recent schedule is obviously more intensive. Yangcheng Evening News reporters saw at the scene that the Hong Kong Stock Exchange had begun to prepare for the relevant ceremony at 8:30 last Friday: the new stock issuing companies gave speeches and toasts, and the round was close to 9:15, and the popularity of the scene was overwhelming.

Why have mainland enterprises flocked to Hong Kong for listing recently? Some securities industry analysts pointed out that although the A-share market has decided to restart IPOs in January next year, there are more than 400 companies waiting in line for review, and they may not be able to go public immediately for financing. In comparison, Hong Kong has easier financing channels, so it is still attractive to companies seeking overseas listings.

Take mainland real estate companies as an example. Although there are rumors that listing on the A-share market may be "opened", it is difficult for ordinary private real estate companies to enjoy the convenience of financing first. Therefore, there will still be more than a dozen mainland real estate companies queuing for IPOs on the Hong Kong Stock Exchange next year.

"We now see that there are still some companies that are being reviewed by the Hong Kong Stock Exchange, and there are probably more than a dozen real estate companies preparing to go public on the main board of Hong Kong. We at UBS also have several cases." At the 2013 Boao Real Estate Forum held recently, Zhao Ju, managing director of UBS Securities and chairman of UBS Investment Bank China, revealed that real estate companies hope to have a platform in the overseas market, which is not only for equity financing, but also easier for bond financing.

Seven mainland real estate companies go to Hong Kong for IPO in one year

Last Friday, Guangdong local real estate company Longfor Properties successfully listed in Hong Kong, which is also the last quota open to mainland real estate companies in the Hong Kong stock market in 2013. It is reported that there are more than 40 mainland real estate companies listed in the Hong Kong stock market. According to the Hong Kong stock IPO data this year, Longfor Properties is the seventh mainland real estate company to go to Hong Kong for listing this year after Jinlun Tiandi, Wuzhou International, Contemporary Land, Yide International, Jingrui Holdings and Times Real Estate. In addition to IPOs, mainland real estate companies such as Vanke and Greenland also use shell companies to build their H-share platforms in Hong Kong.

On that day, Longfor Properties' offering price was HK$2.10, raising about HK$1.484 billion. Yesterday morning, Longfor Properties opened higher with a 1.9% increase, and rose again in the late trading, closing at HK$2.15, an increase of 2.38%.

It is understood that Longfor Properties has been operating for listing since 2007, but it has been stranded for many times due to various reasons. Ji Haipeng, Chairman and CEO of Longfor Properties, said frankly that the company chose to go public not only to expand financing channels and accelerate the pace of development, but also to further strengthen and enhance the company's brand influence and core competitiveness.

Industry insiders analyzed that in addition to financing channels, mainland real estate companies are scrambling to go public in Hong Kong, and they are more concerned about the improvement of corporate brand publicity and appeal. Regarding the successful listing today, Ji Haipeng said that he will build Longfor Properties into one of China's largest property developers with the core competitiveness of "low cost and high profit".

Focus

Is the refinancing of real estate companies intended to grab land?

In recent years, the financing door of China's A-share market has been closed to real estate companies, and going public in Hong Kong has long become the main way for real estate companies, especially small and medium-sized real estate companies, to go public.

Statistics show that since the listing of Xuhui Holdings in November last year, which kicked off a new round of enthusiasm for small and medium-sized real estate companies in the mainland to go public in Hong Kong, real estate companies such as Sunac China Holdings, Jinlun Tiandi, Wuzhou International, Contemporary Land, Jingrui Real Estate, Yide Holdings, Times Real Estate, and Longguang Real Estate have successfully listed. Industry insiders pointed out that this shows that the capital market is currently optimistic about the entire real estate industry, mainly because China's property market has begun to pick up since the second half of last year.

It is worth mentioning that with the increase in the number of real estate companies with a market value of hundreds of billions, it is becoming increasingly difficult for small and medium-sized real estate companies to survive, and it is a better choice for small and medium-sized real estate companies to raise their profile through listing financing. From the perspective of refinancing purposes, Zhang Hongwei, director of Tongce Real Estate Research Center, believes that at present, general real estate companies do not lack funds for survival, but funds to support corporate development and expansion. At this stage, if real estate companies do not quickly obtain cost-effective land and adjust their land reserves, they may miss development opportunities. From this perspective, whether real estate companies are scrambling to throw out refinancing plans in the A-share market or going to Hong Kong for OPI, the main purpose is to invest in development and acquire land for expansion.

Towards the end of the year, while mainland Chinese people are rushing to Hong Kong to shop during the Christmas "discount season", mainland companies are rushing to catch the last train to go to Hong Kong for IPO.

Yangcheng Evening News reporters found that the Hong Kong Stock Exchange issued 6 new stocks in a row last Friday alone, 5 of which were from the mainland. It is reported that the Hong Kong Stock Exchange usually arranges a maximum of 4 new stocks to be "launched" in one morning, but recently it has to schedule intensively to meet demand. Some analysts pointed out that although China's A-shares have decided to restart IPOs in January next year, they may not be able to go public for financing immediately. For companies, it will take some time for the mainland's refinancing channels to open, so the demand for Hong Kong's financing channels will naturally increase significantly.

Text/Photo by Yangcheng Evening News reporter Zhao Yanhua from Hong Kong

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