10 red chips are expected to be the first to return, but now is not the best time

Investor newspaper (reporter Shi Yumin) A string of signals seem to imply that red chips are back or on the agenda. May 11, in the "Second Sino-British Economic and financial dialogue", China agreed to eligible British companies listed in the A-share, the same day, the Shanghai government said it will promote the red-chip company A-share listing.　　For a time, the speculation that red chips will start again becomes a hot topic. In an interview, the investor newspaper learned that currently in line with the China Securities Regulatory Commission has 10 of red-chip companies, respectively, China Mobile, Chinese offshore oil, China Overseas Development, Huarun business, Huarun Power, Guangdong Investment, Shanghai Industrial Holdings, June Wei Automobile, CNPC (Hong KONG) and China Telecom.　　　Among them, the most likely to be the first to return to the Chinese mobile, China offshore oil and telecom. 10 is expected to take the lead in return "in Hong Kong red chips, the main business clear and occupy a certain position in the same industry, in our national economy plays a role in the big blue-chip companies will be the first to return."　　"Yang Weizun, a joint securities analyst, said in a related report. As early as 2007, the SFC issued a draft of the "pilot scheme for the first public offering of shares in mainland China", a preliminary determination of the conditions of return: 1 years on the HKEx listing and no less than HK $20 billion; net profit in the last three fiscal year not less than 2 billion　　More than 50% of the operating assets in the territory, or more than 50% of the profits from domestic business. Up to now, a total of 96 companies are listed in Hong Kong by red chips. By filtering the above conditions, in 2007, Yang Weizun estimated that 14 companies were eligible, namely China Mobile, CNOOC, China Netcom, Lenovo Group, Merchants International, Citic Pacific, China Overseas Development, Huarun venture, CR Power, CITIC International Finance, Yuehai Investment, Shanghai Industrial Holdings, June Wei Automobile　　, CNPC (KONG).　　Two years later, as Hong Kong stocks went through a slump, 10 were still eligible as of May 12, 2009. In addition to Lenovo Group, China Merchants International, Citic Pacific last year, the profit fell 3 years accumulated profit of less than 2 billion yuan, and the Chinese netcom into China Unicom, CITIC International finance by CITIC Bank acquisition, the remaining 9 of the basic conditions are met. Among them, CNPC engaged in crude oil and natural gas mining, the market value of HK $19.092 billion, from the stipulated 20 billion yuan gap is very small, so temporarily put it on the return list.　　In addition, China Telecom's overall financial situation is also in line with the return conditions.　　Among these companies, China Mobile and CNOOC are the first to return to a shares the most likely. China Mobile was listed in Hong Kong in 1997, raising $4.2 billion trillion.　　Previously, mobile chairman Wang Wang on several occasions, expressed the hope that an early return to a shares, so that mainland investors can share its development results. China's offshore oil has expressed a strong return to regulators as early as 2007A-share wish.　　In the company's view, China's offshore oil has the obligation to return to domestic and Chinese economic growth, while sharing development results with shareholders. Journalists noted that the industry is rumoured to be the regulator's intention to let telecommunications companies return first.　　This means that China Telecom may also be the first to return to the red-chip companies. Three return path to choose "for red-chip companies, the use of the path to return more attention." Liu Jiazhang, senior analyst at National Securities, told the investor newspaper.　　In his view, the future red chip return is most likely to take three ways-directly back to a shares issue shares, CDR (depository vouchers) and international board. Mr Wang disclosed in a March performance note that a CDR listing could be more beneficial.　　At the same time, the central bank in the 2008 International financial market report, began to explore how red chips via international board. In the interview, the reporter noted that there are more differences on the way to return, even vice chairman of the Securities and Futures Commission Mr Yao in the "Second Sino-British Economic and financial dialogue," said, now can not guess which way to return to the fast.　　Which obstacle to solve first, which can be carried out first. He takes CDR as an example, and if this is the case, some technical and legal issues such as the exchange of Tang, managed lines, stocks and vouchers need to be addressed.　　Therefore, which way to take is inconclusive. In Southwest Securities analyst Zhou Xing, using CDR is not the best choice. One is because depository receipts belong to alternative securities, can not be counted into the stock market value. And the domestic market has not issued a depository certificate of the Department regulations. As a result, underwriters are unable to issue depository receipts in the territory, and depository vouchers are intended to enable residents of one country or region to invest in another country or region. In general, the core business of the invested company is not in the country or region where the investor is located.　　While the core business of red chips is in China, it is likely that the CDR will be confused with the foreign companies outside the core business in the future a-share market. Liu Jiazhang also believes that if the red chips return, it is unlikely to adopt CDR and international board. "The issue of CDR takes a long time to formulate and adjust the new listing rules, on the contrary, there are many precedents for listing, the most appropriate option should be a direct return to a shares issued shares."　　"It's not the right time to return." Many analysts said that although there has been a discussion of red-chip return, but the current domestic IPO has not yet restarted and the stock market is not fully "cattle" background, red chips also difficult to talk about the return. "In terms of regression technology, now is not a problem. H-shares such as PetroChina have returned. Liu Jiazhang pointed out that the only problem now is, "red chips are large stocks, financing at a rate of billions of yuan, issued to the market must not bear, the market is not so optimistic."　　The implication is that the return of red chips will depend on the performance of the stock index. Guotai analyst Shangpeng also believes that there is little point in the return of red chips. This is because most red-chip companies do not lack the financing channels, "their return to the A-share market, the impulse to finance is not urgent." ”