Recently, besides the unpredictable USA tariff policies, the risk of potential financial sanctions is also rising, especially concerning Chinese stocks in the US market. Previously, the US Treasury Secretary stated to the media that Chinese stocks listed in the USA could be delisted as part of trade negotiation terms.

In response, on April 13, Hong Kong's Financial Secretary Paul Chan Mo-po stated in his blog that Hong Kong has established a regulatory framework to facilitate the dual listing of companies that are already listed overseas.Dual ListingThe Hong Kong Securities and Futures Commission and the Hong Kong Stock Exchange are ready to ensure that if Chinese stocks listed overseas wish to return, Hong Kong must become their preferred listing location.

According to statistics, there are currently over 100 Chinese stocks listed in the USA, among which Goldman Sachs estimates that more than 20 Chinese stocks meet the requirements for returning to a listing in Hong Kong and may be eligible forDual primary listing.orSecondary listings.。

These Chinese concept stocks include:$PDD Holdings (PDD.US)$、$Full Truck Alliance (YMM.US)$、 $Futu Holdings Ltd (FUTU.US)$ 、$Legend Biotech (LEGN.US)$、$Vipshop (VIPS.US)$、$ZEEKR (ZK.US)$、 $TAL Education (TAL.US)$ 、$Atour Lifestyle Holdings (ATAT.US)$、$RLX Technology (RLX.US)$、$21Vianet (VNET.US)$、 $JOYY Inc (JOYY.US)$ 、$Hesai (HSAI.US)$、 $UP Fintech (TIGR.US)$ 、$FinVolution (FINV.US)$ 、$Daqo New Energy (DQ.US)$、$iQIYI (IQ.US)$、$LexinFintech (LX.US)$、$JinkoSolar (JKS.US)$、 $Hello Group (MOMO.US)$ 、$Uxin (UXIN.US)$ 、$EHang (EH.US)$、$China Yuchai International (CYD.US)$、 $Yiren Digital (YRD.US)$ 、$Dingdong (DDL.US)$、$Qudian (QD.US)$and$Jiayin Group (JFIN.US)$。

The following is a chart compiled by Futubull of Chinese concept stocks that have returned to Hong Kong for listing and meet the requirements for returning to Hong Kong for listing.

There are mainly three ways for Chinese concept stocks to return to the Hong Kong stock market: new applications for listing in Hong Kong after privatization and delisting in the USA, secondary listings in Hong Kong, and dual primary listings in Hong Kong.

Among them, the process of secondary listing is simple, requires a short amount of time, and has multiple compliance exemptions; whereas in the case of dual primary listing, since both capital markets are regarded as the primary listing place, the company must comply with all listing rules in Hong Kong. Compared to secondary listing, the biggest advantage is that it can be included in the Stock Connect.

Currently, $Alibaba (BABA.US)$ / $BABA-W (09988.HK)$ 、 $NetEase (NTES.US)$ / $NTES-S (09999.HK)$ 、 $JD.com (JD.US)$ / $JD-SW (09618.HK)$ Chinese concept stocks have already been secondary listed or dual primary listed in Hong Kong. Taking Alibaba as an example, it transitioned from a secondary listing to a dual primary listing in August 2024 and was included in the Hong Kong Stock Connect in September of the same year. This change not only enhanced its trading activity in the Hong Kong stock market but also brought in more mainland investors.

From a market performance perspective, the IPO market in Hong Kong has continued to recover since the second half of 2024. According to Deloitte's statistics, in the first quarter of 2025, the Hong Kong Stock Exchange had a total of 15 new stocks listed, collectively raising 18.2 billion Hong Kong dollars, marking year-on-year increases of 25% and 287%, respectively. Additionally, the number of listing applications received by the exchange and cases under processing has also increased compared to the same period last year. These data indicate that the Hong Kong stock market is attracting more funds and enterprises, with vibrancy continuously enhancing.

What is the impact?

In fact, concerns about the delisting of Chinese concept stocks have existed for a long time. As early as 2021, the SEC in the USA introduced delisting regulations based on the Holding Foreign Companies Accountable Act, which triggered a wave of Chinese concept stock returns. Subsequently, the issues related to the Holding Foreign Companies Accountable Act have been resolved through an agreement on audit procedures reached between the governments of China and the USA.

However, Institutions expect that the potential impact this time is more manageable compared to the past, as many large Chinese concept stocks have already been dual-listed.

After experiencing the 'delisting turmoil' of Chinese concept stocks over the past few years, especially in 2022, the vast majority of large Chinese privately-owned stocks listed in the USA (such as Alibaba, JD.com, Baidu, etc.) have returned to Hong Kong for dual major or secondary listings. Therefore, the companies most affected by delisting are mostly small-cap companies that do not meet the conditions for returning to Hong Kong.

A Morgan Stanley report pointed out that 80% of the Market Cap of Chinese concept stock ADRs are now dual-listed in Hong Kong. Overall, Chinese concept stock ADRs account for about 25% of the MSCI Chinese Index, and even if delisting becomes a reality, the long-term impact on the Chinese stock market is limited. The Hong Kong market could supplement the lost trading volume from the USA in the long run, especially since large enterprises are expected to meet the inclusion criteria for the Stock Connect.

Goldman Sachs' research report noted that in recent months, Chinese concept stocks that have not conducted a secondary/dual major listing in Hong Kong have significantly underperformed compared to their peers, indicating that delisting risk has once again become a focus for investors. Therefore, it is suggested that if a destructive liquidity event occurs, if the relevant Chinese concept stocks carry out major secondary or dual listings in Hong Kong, American investors could flexibly convert their ADRs into Hong Kong stocks, and the potential for these companies to be listed in Hong Kong could catalyze a re-rating.

UBS pointed out that for dual-listed Chinese concept stocks, the proportion of Hong Kong stocks has increased by 30 percentage points over the past three years, now reaching approximately 60% of the total Market Cap. At the same time, the Southbound holdings ratio in the Hong Kong market has also significantly increased, rising from 5% of the Market Cap in 2021 to the current 11%-12%. These factors contribute to mitigating the shock that may arise from delisting in the USA.

Regarding the possible impact of this round of Chinese concept stock repatriation, UBS estimates that there are currently about 230 Chinese concept stocks listed in the USA, with a total Market Cap exposure of 460 billion USD, down from 1.1 trillion USD at the end of 2021. There were panic removals in 2021 and 2022 that led to an average decline of 22% in Chinese concept stocks, and it is expected that the impact this time will be more controllable.

UBS stated that based on past experience, stocks that have not conducted dual listings, have high leverage ratios, negative cash flow, and small-cap stocks are most susceptible to the impact of delisting. Additionally, companies with a VIE (Variable Interest Entity) structure could also become potential targets of the USA's priority investment policy.

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Editor/jayden