Top 10 Chinese Stocks Listed in the US by US Ownership
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, United States, December 9, 2021.
Brendan McDermid | Reuters
BEIJING – Chinese stocks listed in the US with the largest share of US ownership don’t include many big names familiar to Wall Street, according to a Morgan Stanley report.
Growing political pressure from Beijing and Washington means more Chinese companies may have to drop the US list and move to Hong Kong.
But most of the affected stocks have low levels of US ownership, according to a Morgan Stanley report released on December 9. And even those with more US money don’t include well-known names like Alibaba.
Here is the list :
The top five names on the list by U.S. ownership include biotech companies BeiGene and Zai Lab, parent company of KFC Yum China, and dating app operator Hello Group. The fifth name, JOYY, is a live streaming company formerly known as YY.
The median share of US ownership for the top 10 names is 43%, according to CNBC’s calculations of Morgan Stanley data for stocks eligible for secondary listing in Hong Kong. The median for the top 50 names is 27%.
Alibaba’s is well below 13.1%, while Chinese electric car start-up Nio has a slightly higher share at 20.4%, according to the report.
Exchange for stocks listed in Hong Kong
Chinese companies like Alibaba, Trip.com and Baidu have staged secondary stock offerings in Hong Kong in recent years. This means that if stocks listed in the United States are delisted, investors can exchange them for those in Hong Kong.
Other companies, like Nio and video streaming site iQiyi, are immediately eligible to launch a listing in Hong Kong, according to the Morgan Stanley report.
But the report showed that more than 40 Chinese stocks listed in the United States will fail to be listed in Hong Kong over the next two years because they do not meet the stock exchange’s requirements for market value, profit and ‘other measures.
Here is the US ownership of the few stocks with a market value above $ 1 billion that are not eligible for listing in Hong Kong:
In recent months, the Chinese government has made it more difficult to register local businesses in the United States by requiring additional data security reviews.
Just days after its initial public offering in the United States in late June, Chinese rideshare app Didi had to suspend new user registrations for government review. Earlier this month, the company announced that it would be retiring from the New York Stock Exchange and being listed in Hong Kong.
Morgan Stanley did not include Didi in his report.
Meanwhile, the pressure on Chinese stocks is increasing on the US side. The United States Securities and Exchange Commission earlier this month completed the preliminary procedures necessary to begin a process to de-list Chinese stocks that do not allow a US government audit of three consecutive years of financial reports.
However, Morgan Stanley analysts do not expect any forced write-offs until at least 2024.
Non-US institutions or investors will be more affected by such changes. US retail investors only represent about 13% of the volume of US transactions in Chinese stocks listed there, analysts at Morgan Stanley have estimated.