Source: Visual China
The trade war or the Hong Kong stocks "black swan" once the Hong Kong stocks fell sharply, many companies would send out if they wanted to.
Text "China Entrepreneur" reporter Mina
Edit Xu Wei
Unicorns are fighting for the first share of new economic companies listed in Hong Kong after becoming the new policy of the Hong Kong Stock Exchange.
Xiaomi is the fastest-growing one among the new economic unicorns currently listed in Hong Kong, and the recent comments from the US group that has already submitted a listing application at the Hong Kong Stock Exchange may be behind Xiaomi.
According to the Hong Kong Stock Exchange listing process, it usually takes one month from the formal submission of listing applications to the submission of prospectuses, roadshows, announcement of subscription results, and final listing, depending on the speed of approval.
As early as May 2018, Xiaomi submitted a listing application to the Hong Kong Stock Exchange. According to a report from “Hong Kong’s entrepreneurs” from Hong Kong brokerage firms, it is no surprise that Xiaomi was listed in Hong Kong in June. However, in order to support the domestic CDR New Deal, the time for Hong Kong shares to be listed was delayed.
However, on June 19th, Xiaomi suspended the CDR release at the last minute. Fortunet's CEO Qiao Weiwei said to “Chinese Entrepreneur” that “I personally think that both the CSRC and Xiaomi have a strong desire to promote CDR issuance, but there are some technical obstacles that are difficult to coordinate. It takes a long time to resolve these obstacles. The time may again delay the time for Xiaomi to list in Hong Kong. Eventually, Xiaomi chooses to first list in Hong Kong. ”
At this time, the Hong Kong stock market, after surging for a year and rushing to a high of 33,484, was in a relatively delicate period of high volatility adjustment period in recent months. On June 19, due to the panic of the trade war between China and the US, both the Shanghai Stock Exchange and the Hang Seng Index fell sharply. The Hang Seng Index once fell by nearly 1,000 points and fell below 29500 points.
In the past two months, the Hong Kong stock investment market has become divided. The follow-up is that the rise is divergent. Once Hong Kong stocks continue to fall or turn from bear to bear, it will have a significant impact on the valuation of Unicorn.
In order to avoid a long night of sleep, unicorns rushed out and Didi and Ant Financial successively reported news of going to Hong Kong, while Lu Jinsuo, Haidilao, Tencent Music, 51 Credit Card, and Fan Pu Jinke went public in Hong Kong. Also spread within the circle.
After a lapse of ten years, Hong Kong stocks once again usher in the golden age.
In January 2018, the Hang Seng Index successfully reached a new record high of 33,484 points, breaking the historical high previously set in 2008. It rose by more than 30% in 2017 and became the world's best performing index.
The skyrocketing market capitalization of listed companies has also doubled. In 2017, Tencent Holdings listed in Hong Kong doubled its share price and became the company with the largest market value in Asia.
At the time of the big wave, the valuation of technology companies and the market value after listing can often rise. At the same time, the chief executive of Hong Kong Stock Exchange, Li Xiaojia, promoted the biggest change of the HKEx in 25 years since the end of 2017, allowing "equity shares" to be listed and allowing biotech companies that have not yet received revenues to list. The new listing system officially came into effect on April 30, 2018. At this time, listing in Hong Kong is a timely and favorable situation.
Opportunities are not to be missed. When the time comes for the listing, preemptive listing will often take the initiative.
As of June 20, 2018, the total market value of Hong Kong stocks reached 33.9 trillion yuan, and that of Shanghai and Shenzhen was 50.9 trillion yuan. The market capacity of Hong Kong stocks is relatively small.
“In 2017, the trading volume of Hong Kong stocks was only one-sixteenth of the annual turnover of US stocks, and only one-sixth of A shares. Du Kun, vice president of Capital Rock Capital, stated that "Hong Kong stocks have a relatively small amount of capital, just like the pool's space is limited. If more and more unicorns are listed, the more capital that comes behind, the more limited." Therefore, in the front, the valuation will obviously be higher than the later ones. The first batch of companies listed in the window period will have better valuations than the latter. ”
Qi Biwei also believes that the advantages of the first will be taken up. Now that the Hong Kong market is relatively short of new economic companies, the first ones are more sought after. Slowly, investors will experience aesthetic fatigue.
However, it is surprising that the Hong Kong stock market has fallen in the near future. On June 20th, Morgan Stanley strategist cut the 12-month target of the Hang Seng Index by approximately 10% to 27200 points, implying that the Hang Seng Index will fall by about 18% from the January high, close to the usual indication that the market will enter a bear market. Adjust the amplitude.
Morgan Stanley believes that rising interest rates, the devaluation of the renminbi, and the deterioration of the U.S.-China trade relationship will jointly threaten Asian economic growth and corporate profits. "We believe there is further risk that the Hang Seng Index will fall further in the short term."
June 21 officially landed at the Hong Kong Stock Exchange's Mainland's “Smart Finance First” ” Visin Gold Branch soon broke, and on June 15th, third parties listed on the Hong Kong Stock Exchange also paid for the first remittance. On the first day of listing, the issue price fell below.
"The hotness of Hong Kong stocks is now much worse than at the beginning of this year. It is obvious that the market has deteriorated. Hong Kong-listed Zhong An Online and Yi Xin Group were much more fortunate in 2017. ” Yan Biwei said.
The correction of Hong Kong stocks will have a certain impact on the listed companies that are financing. According to Bloomberg News, the millet Hong Kong IPO’s pricing range has been lowered from rumors of US$75-80 billion to US$55-70 billion.
As early as May 2015, after the Hong Kong stocks entered the phase of a bear market, the listed company's stock price fell to the “cabbage price”, and the window period for listing was also close to closing. Even in 2016, Wang Jianlin believed that the market value of Wanda commer- cials in Hong Kong stocks was lower than their net assets, and they chose to withdraw the company from Hong Kong stocks.
"The US group is also accelerating its listing," said Qi Biwei. It was previously reported that after entering the taxi field and acquiring Mobai, the value of the US group’s listing in Hong Kong may reach US$60 billion. The new economic companies listed in Hong Kong, "investment banks are more common practice is to follow the valuation of the same type of company listed on the domestic and foreign markets, Xiaomi is now the subject of Apple, and the US group is more complex, there is no target company . ”
However, the future of Hong Kong stocks will go, no one can control. "Alibaba listed in Hong Kong in 2007, but also caught up with the financial crisis, affecting the listing financing at the time, but ultimately chose to go on. If companies think that the market is not good and the valuation is low, they can't. If you can't wait any longer, the price will only be lower. ” Yan Biwei said.
In the early hours of June 14, the Fed announced once again that it would raise interest rates and raise the target range of the federal benchmark interest rate by 25 basis points to 1.75%-2%. This is the first time since the financial crisis began in 2008 that it has returned to the 2% mark for the first time. . Subsequently, the Hong Kong Monetary Authority followed the pace and raised the basic interest rate of the discount window by 25 basis points to 2.25%.
For the global capital market, the Fed’s continuous increase in interest rates means that the taps for global capital are slowly tightening. In the long run, as the interest rate hike will attract Hong Kong dollars back to the United States, the Fed will continue to raise interest rates to make negative stocks.
But Deng Tishun, chief investment officer of UBS Greater China, believes that raising interest rates is only one of the more unfavorable factors affecting these unicorns in the Hong Kong listing period. What worries more is the unpredictable factors, such as Sino-U.S. trade. war.
Since the establishment of the Hong Kong Stock Exchange, there have been several sudden closures of the Hong Kong stock market due to the black swan event: one was the 2003 SARS crisis and the other was the 2008 financial crisis.
"Hong Kong stock market is essentially a business. As long as the company does not lie, some investors are willing to pay for it at any time. In 2015, the valuation of Hong Kong stocks was low. There are not many companies willing to go on the stock exchange, and it can also be called a window closure. Deng Xiaoshun said to "Chinese entrepreneurs," but Hong Kong stocks rose after two years, and now the company's valuation is at a relatively good level. This is a good window period.
As the Hong Kong stock market contains a large number of "Chinese elements", for now, Hong Kong stock investors are more worried about the trade war between China and the United States, and what impact this event will have on future economic and trade relations and investment between the two countries.
At the beginning of 2018, Hong Kong stocks began to enter a turbulent period under the influence of the trade war and the Hong Kong dollar exchange rate. On April 10, Trump issued a trade war settlement signal, and the Hang Seng Index opened 259 points higher on the same day. On June 19, Trump threatened to levy tariffs on an additional US$200 billion worth of Chinese goods. As soon as the news came out, the A-share limit fell on the day, and Hong Kong stocks once fell by a thousand points.
Under cover, do you have eggs?
Qi Biwei believes that once the A shares fall, it will be difficult for the Hong Kong stocks to get out of the independent market. "Looking at the trade war between China and the United States is a long-term issue. If the trade war develops further, the trend of Hong Kong stocks is hard to say." Once the Hong Kong stocks plummet, there will be many companies that want to go public. ”
However, there are still many institutions that are optimistic about the outlook of Hong Kong stocks. Shao Zhiming, Senior Investment Strategist, Asia Pacific, Credit Suisse, said on June 20 that the 2018 Hang Seng Index is expected to rise to 33,000 within three months. Du Kun believes that the United States will increase the interest rate will affect the amount of funds, and Hong Kong stocks before the increase was relatively large, the follow-up market is more difficult to determine.
At present, in the domestic context of de-leveraging, controlling bank credit lines, and tightening monetary conditions, corporate financing has become more difficult. In May 2018, the increase in China's social financing scale reached the lowest level in two years. The balance of corporate bonds at the end of May was RMB 19.14 trillion, and the net financing decreased by RMB 43.4 billion during the month, which was the first time since June 2017 that it fell into negative value. .
The listing process of the A-share market has been proceeding slowly since 2018. As of June 15, there are still 279 enterprises that queue up A-share IPOs. For new economic companies that need financing, when domestic monetary tightening, even if the Hong Kong stock market begins to deteriorate, listing in Hong Kong is still a good financing channel.
The dispute between the three places
Today, mainland China A-shares, US stocks, and Hong Kong stocks are all pursuing new economic unicorn companies for listing. However, at present, the Hong Kong Stock Exchange is in the limelight in this wave of listings.
On June 13th, Li Xiaoga was re-elected again, which gave a shotgun tranquilizer to domestic unicorns waiting to go public on the Hong Kong stock market. Li Xiaojia will serve as CEO of the Hong Kong Stock Exchange Group for a term of office from October 16, 2018 to October 15, 2021.
Li Xiaojia is a reformist and soul figure of the Hong Kong Stock Exchange. During the eight years he took charge of the Hong Kong Stock Exchange, he had regretted Alibaba.com, but more has achieved various results: Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, Bond-Link; the acquisition of the London Metal Exchange (LME), etc. .
Li Xiaojia once said that the listing of A shares is an arranged marriage, and Hong Kong stocks are free love. Compared with the three markets, the design of the listing system for Hong Kong stocks has become closer to Nasdaq for US stocks. However, Hong Kong stocks have their own unique advantages.
"Hong Kong stocks and U.S. stocks are low thresholds and use a disclosure system. However, if investors from the two places understand the Chinese mainland companies, it is clear that the Hong Kong market understands Chinese companies better." "Yi Biwei said.
In addition, although the relevant costs of legal accounting, such as listing in the United States and Hong Kong, are not much different, for listed companies, US stocks have a class action system, while Hong Kong stocks do not.
As far as valuations are concerned, the three cities have the highest A-share listing threshold and give the new-economy companies the highest valuation.
At the beginning of 2018, 360 companies successfully listed on A-share backdoors. As of June 21, the market value reached 184.5 billion yuan, and when the 360 delisted from US stocks, the market value was only 50.4 billion yuan. Previously, LeTV, which was listed on the A-share market, had once reached a crazy 152.6 billion yuan market value.
Unfortunately, the current listing of new economic companies and even the return of A shares still faces various obstacles.
However, Hong Kong stocks and US stocks are more internationalized, and the valuation of new economic companies will not be much worse. Among them, the technology companies and financial companies in the new economic company are different. "Technology companies will give a higher valuation, such as Tencent's PE has reached 60 times, and the market for financial companies' PE is up to 20 times." ” Yan Biwei said.
This is because future development prospects are a very important indicator of valuation. Deng Tien-Shun said that the current high valuation of technology companies is due to the fact that many technology companies can grow at a rate of 100% to 200% per year, while financial companies generally have 20% to 30%.
Every new star new economic company listed on the Hong Kong Stock Exchange will bring a large number of new customers to the Hong Kong Stock Exchange. For a long time in the past, Tencent topped the list of technology stocks in Hong Kong stocks. Tencent and the Hong Kong Stock Exchange achieved each other's achievements.
Which of the new economic unicorns in this round of listing will be most welcomed by Hong Kong stock investors? Who will become the first of the new economic companies listed in this round? Yan Biwei believes that ultimately, the overall strength of the enterprise must be considered, just as the state-owned and bank stocks listed in Hong Kong were more sought after when they first started, and the share price gradually fell back, and for a long time, the stock price still has to fight strength. (New economic companies refer to companies that include new technologies, new industries, new business models, and new models)