China and AmericaFinanceDispute heats up, fromAliJingDongLooking back at the three major investment opportunities, the return of China-listed stocks may bring at least three investment opportunities: 1) scarce investment, the strong areas of China-listed stocks-Hong Kong stocks-A shares are strongly complementary. The return of the leaders of the strong areas of Chinese-listed stocks (e-commerce / online education / social media / streaming media, etc.) is expected to bring scarce investment opportunities. We have selected 25 stocks to meet the conditions for the second listing of A shares / Hong Kong stocks. 2) capturing the valuation difference, there is a third-order valuation difference in China-Hong Kong stocks-Hong Kong stocks-A shares, there is also a valuation difference in the components of Hong Kong stocks in non-Hong Kong stocks-Hang Seng Index, and there is an opportunity to capture the valuation difference in the gradual progress of returning to Hong Kong-entering the pool-dyeing blue-northward. In the case of no significant Risk-off in the AH and the two markets, the cumulative rise of the valuation center may reach 45%. 3) the return of Chinese stocks may enhance the two-way attractiveness of Hong Kong stocks moving southward (scarcity) and foreign capital (China's leading logic).
The three major scenarios of the Sino-US financial dispute: the Accountability Law has a low probability of landing but has great lethality. The Sino-US financial dispute is concentrated in three major areas: restricting listing in the United States, tightening credit censorship, and cutting off securities investment. Corresponding to three kinds of deduction situations: 1) ifNASDAQIf the new IPO rules are approved by the SEC, small and medium-sized medium-sized stocks will face strong obstacles to listing in the future. 2) if the Foreign companies Accountability Act is approved by the House of Representatives and Trump, it will bring systematic delisting risks to listed Chinese stocks in the United States. 3) the plan for US federal employee pension funds to invest in Chinese stocks has been shelved, which may lead to the failure of about $5.8 billion in potential net inflows. The second of the above three points, the "Accountability Law" has a relatively small short-term landing probability but a large tail risk, and there is no choice but to return to Hong Kong recently, but in recent years, the positive supply-side reform in the AH market has also paved the way for the return of Chinese stocks, and the return of US-listed stocks is also the choice of the times.
China General-Hong Kong stocks-A shares are highly complementary, and 25 US-listed stocks or meeting the conditions of returning to Hong Kong and returning to Hong Kong-Hong Kong stocks-A shares are strongly complementary in the strong field. China-listed stocks such as e-commerce / online education / social media / streaming media may bring scarce investment opportunities. We believe that the short-term return wave will focus on large market stocks that meet the requirements for the secondary listing of A shares or Hong Kong stocks, except for BABA who has returned.NetEaseIn addition to JD.com, we have selected 25 Chinese stocks to meet the requirements for secondary listing, of which 17 meet the requirements of Hong Kong shares, 19 meet the requirements of A shares, and 11 meet the requirements of both A shares and Hong Kong stocks. Chinese stocks with low financing demand may prefer secondary listing of Hong Kong stocks (short listing process + global investors), while Chinese stocks with high financing demand may prefer secondary listing of A shares (valuation advantage).
Back to Hong Kong: valuation reshaping back to Hong Kong → into the pool → blue three steps, accumulative range may be up to 20% due to differences in business recognition, capital, investor risk preference, etc., the same stocks may have significant valuation differences in the three markets of China-listed stocks, Hong Kong stocks and A shares, while ordinary Hong Kong stocks may have significant valuation differences due to different capital radiation.Hong Kong Stock ExchangeConstituent stocks and Hang Seng Index constituent stocks also have poor valuations. If the leading Chinese stocks choose to be listed in Hong Kong, it is expected to achieve a rise in the three-tier valuation of returning to Hong Kong-entering the Hong Kong Stock Exchange) and dyeing Blue (into the Hang Seng Index). In the absence of significant Risk-off in the market, we expect the three-tier valuation to increase by 7%, 16%, 5% and 5%, respectively, with a cumulative range of about 20%. Among them, the first stage of "returning to Hong Kong", judging from the cases of BABA and JD.com, the valuation rise may start in the range from hearing to pricing and end near the IPO day.
General description A: refer to AH premium andMedium coreIn the course of going back to A, the cumulative range of valuation rise may reach 45%. If the leading Chinese stocks choose to be listed directly in A shares, without significant Risk-off in the market, the valuation increase may be 45% (that is, an additional 25% valuation increase can be obtained compared with the second listing back to Hong Kong). It is understood from two ways: 1) since the opening of the Shenzhen-Hong Kong Stock Connect at the end of 2016, the AH premium index fluctuated in the range of 115-135. the hub is about 125. This means that if the Hang Seng Index + Hong Kong Stock Connect double constituent stocks (representing the most liquid stocks in Hong Kong stocks) go northward to A shares, they may get an additional 25% valuation increase on average. 2) with reference to Semiconductor Manufacturing International Corporation, the forerunner of the second listing of A shares, the stock price outperformed the domestic wafer foundry leader after he announced in early May that he would go to Science and Technology Innovation Board for listing.Hua HongThe range is about 18%, which is also close to the 25% premium center of AH.
Risk hints: the progress of the return of Chinese stocks is not as expected; the global risk appetite has plummeted; there is a substantial outflow of foreign capital; and the rise of the valuation center based on historical circumstances may be biased due to changes in the market environment.