Special interview
Author: Hu Xueneng
2020-12-31 07:30
Last update date: 2020-12-31 07:30
The Hong Kong accounting profession has a large population of employees. According to informal statistics, there are about 200,000 people. According to statistics from the Hong Kong Institute of Certified Public Accountants, there are nearly 45,700 members (accountants, senior accountants) alone.
The relationship between China and the United States has taken a sharp turn this year. At least seven Chinese concept stocks listed in the United States are listed in Hong Kong as a secondary listing. The listing of companies often involves accounting work. Particularly benefited, "I can say that the return of China's concept stocks is "getting a shape." For example, Alibaba was listed in the United States, and it came to Hong Kong (second) to list. It was nothing more than preparing a Chinese prospectus, and the Stock Exchange gave Many exemptions...without following Hong Kong's auditing and accounting standards."
However, Lin Zhiyuan believes that with the increasingly sinister geopolitical environment, the risk of China's concept stocks facing delisting in the United States is increasing, or Hong Kong is selected as the first listing, which is expected to benefit the Hong Kong accounting community.
He believes that once the Chinese concept stocks listed as a secondary listing in Hong Kong are delisted in the United States, Hong Kong will be implicated.
According to relevant regulations, if the issuer’s global trading volume of listed shares (including the trading volume of depositary receipts for such shares) of the issuer in the most recent fiscal year is 55% or more conducted on the Hong Kong Stock Exchange, the Hong Kong Stock Exchange shall treat it as such. Most of the listed stock transactions have been permanently transferred to the Hong Kong Stock Exchange market, and the main listing requirements of the Hong Kong Stock Exchange are required.
If China concept stocks "re-register", business opportunities are huge
However, Lin Zhiyuan pointed out that once the primary listing is suspended locally and the transaction volume becomes zero, how should Hong Kong be handled as a secondary listing, the relevant regulatory agencies lack a handling mechanism.
At the beginning of this year, he expressed concern to the relevant regulatory agencies, and the other party said that they needed to study and follow up.
He hopes that the regulator will eventually formulate a mechanism to deal with this, and the relevant Chinese concept stock reform to adopt Hong Kong as the primary listing supervision will change to adopt Hong Kong or international accounting standards, which is a big business opportunity for the Hong Kong accounting industry.
"If these large Chinese concept stocks are relisted from the United States and returned to Hong Kong (first listing), there will be a lot more procedures. At least they will have to set up an office in Hong Kong. The number of years...I guess Hong Kong will not let you continue to use US accounting standards because of your relocation.” As for the industry’s response to the relocation of Chinese concept stocks, he believes that the supporting preparations are not yet ready because they have not been discussed. The relocation of China's concept stocks to Hong Kong's No. 1 listing is expected to involve audit fees, contracting fees, etc., and the employment of lawyers and company secretaries is believed to benefit a wide range of industries.
Lin Zhiyuan believes that when the Chinese concept stocks listed in the United States begin to think about or even plan to change to Hong Kong as the first listing, and delisting from the United States has become a trend, mainland companies that are planning to list in the United States may change to directly listed in Hong Kong. , Then it will be the second wave of China concept stocks returning.
He pointed out that some companies believed that there would be more restrictions on listing in Hong Kong, and some tech-net stocks believed that the valuation of listing in the US was higher.
Unexpectedly, the current Sino-US relations are at a trough, and political factors may lower the valuation, and the attractiveness of Hong Kong's listing will increase accordingly.
"If a new (Mainland) company plans to go public in the future, Hong Kong may be given priority."
Although the accounting industry still has development potential in the Hong Kong market, Lin Zhiyuan believes that compared with the mainland, opportunities are greater. "The Greater Bay Area is an opportunity for young accountants. If there is no burden, you can try to run." Accounting standards are not difficult to adapt. , But need to be psychologically prepared to adapt to cultural differences.
"When I was studying, my professor often said, "Don't think of China as a market. In fact, China is a lot of markets. There are many cities in the Greater Bay Area. The locals communicate with us in Cantonese. If we speak with one voice, we will communicate better." The younger generations from the Mainland are sometimes very active. On the contrary, the younger generations from Hong Kong are taken care of by their parents and sometimes pursue the quality of life. Young people from the Mainland don’t mind working on weekends. Sometimes the youths in Hong Kong may not be enough for them to fight."
The above was published in the 246th issue of "Hong Kong 01" Weekly Report (December 28, 2020) "China Concept Stocks Returning to the Waves to Meet the Waves. Lin Zhiyuan calls on the accounting industry and regulators to do a good job of supporting them. If you want to read the full text, please
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