SEC updates the pre -delivery list, and 159 Chinese stocks such as Alibaba are "on the list". Is it worth worrying about?

On July 30, Beijing time, the US Securities and Exchange Commission (SEC) updated a batch of "pre -delisting list" on July 29 local time. 4 Chinese stock companies including Alibaba, Mushroom Street, Cheetah Mobile, Poch Pets were Add list.

At this point, the agency has included 159 Chinese stock companies including Baidu, JD.com, Bilibili, and Pinduoduo. 153 of them have been transferred to the determined list because they cannot prove that the delisting conditions cannot be proved within the time limit.

Earlier, many companies such as JD.com and Baidu announced this, saying that they would actively abide by laws and regulations applicable to the market, and maintain their listing position in the securities markets between the two places when conditions permit.

The emergence of the "pre -delivery list" originated from the "HFCAA" adopted by the United States last year. It stipulates that foreign issuers listed in the United States hire accounting firms from the jurisdictions of the United States to issue audit reports. They cannot meet the audit requirements of accounting firms for accounting firms for accounting firm (PCAOB), and relevant listed companies will be included in " Pre -delivery list ".

Therefore, the Chinese stock company is included in this list, which is actually just a conventional procedure for the U.S. regulatory authorities to implement the "Accountability Law of Foreign Companies". Only for three consecutive years of SEC determined that the audit institution that failed to be reviewed by the PCAOB review and audit draft issued an annual audit report, will listed companies be delisted on the US exchanges.

Pre -delivery does not mean to delist

The impact of the pre -delivery list is gradually decreasing.

For the Chinese stocks that enter the pre -pick -up list, the stock price is generally the first. After SEC first announced five pre -delivery listed companies in March this year, the stock price of relevant companies fell significantly.

Since then, with the acceleration of the pre -delisting process, compared with the short -term fluctuations caused by the initial stock price of related companies, the capital market has gradually become normal to pre -delisting. Even on the day of the list of many Chinese stocks, it still rose with the overall trend of US stocks.

The most direct reason for this change is that the pre -delivery list does not mean that it will immediately delist from the United States.

After boarding the pre -delisting list, the relevant company can prove to the SEC within 15 days to prove that they do not have the conditions to be passed, otherwise they will be transferred to the determined list. If the company, which is included in the determination list, cannot meet the PCAOB's inspection requirements for auditors within three years. Theoretically, after disclosure of 2023 reports (early 2024), it cannot be traded on the US stock exchange and forced delisting.

In other words, since the risk is truly transformed into reality, there is still sufficient space for the audit supervision and cooperation dialogue between the two countries, and it is also prepared for relevant enterprises to prepare enough time.

Secondly, the pre -delisting list does not have any substantial impact on the operation of related companies. This can be seen from the performance of 155 companies on the pre -delisting list before, and the market has reason to be optimistic.

Gold Plug -in Umbrella of Chinese Stocks

Regardless of whether the United States is really willing to resolutely abandon more than 200 Chinese stock companies, even if it becomes a high probability event after the US delisting, Sino -stock stocks also have "golden parachutes".

In recent years, the Hong Kong Stock Exchange has continued to focus on the development needs of global markets, and launched a series of reform and innovation measures to create conditions for the return of China Stocks as the attractiveness of listed destinations.

Since the reform of the listing system in 2018, China Stocks have gradually returned to Hong Kong stocks in different forms. According to incomplete statistics, 4 of which are privy listing after the privatization, including Chinese Fei Crane, Yaoming Kangde, Yiju China and Le Chao Games; 9 are Duel Primary Listing, including Baiji Shenzhou, ideal car, etc.; 16 for the second listing (Secondary listing). Especially since this year, China Stocks has accelerated to return to the Hong Kong stock market through dual major listing.

On the other hand, on July 22, the Singapore Exchange and the New York Stock Exchange jointly announced the signing of an agreement. The two parties will cooperate on the double major listing of enterprises and take the opportunity to enhance the influence of the Singapore Exchange in the global financial market. Conditions, "competition" more refund in China.

On July 26, Alibaba Group issued an announcement that the board of directors had authorized the Group to submit an application to the Hong Kong Joint Exchange and intend to add Hong Kong as the main listing place. After the Hong Kong Stock Exchange completed the audit process, Alibaba will double the main listing on the main board of the Hong Kong Stock Exchange and the New York Stock Exchange.

The Hong Kong stock market has a bridge to connect Chinese enterprises and world investors, while interconnection with the Mainland is becoming increasingly mature. Chinese stocks choose to double the market in Hong Kong. Once it is included in the Hong Kong Stock Connect, it will help significantly expand and enrich the foundation of investors. It also provides more choices for mainland investors to better share the growth dividends of enterprises.

CICC expects that more and more overseas issuers will choose to return to Hong Kong stocks by dual major listing. This move objectively can effectively avoid cross -border regulatory risks, better cope with the uncertainty of a single market, so as to better cope with the challenges brought about by changes in the external environment. It is the best business choice to protect the interests of investors.

Some market analysis believes that through the double main listing, the risk of the delisting of China stocks has further buffer. For companies that have landed in China, which are in China, which are main business and major market transactions, it is expected to usher in valuation repair and at least thickened the safety pads.

There is a plan for ahead, and there is also a "golden parachute" base. There is no need to be pessimistic about the development prospects of Chinese stocks.

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