A 17 per cent surge since its listing last month has propelled CATL’s Hong Kong-traded shares (H shares) to an 11 per cent premium over their mainland-listed counterparts (A shares), a rarity among the 155 dual-listed companies. And the Hong Kong-listed shares of Hengrui, China’s biggest drug maker by market value, are now nearly on par with the company’s Shanghai-traded A shares. Hengrui also started trading in the city in May.
The H-share discount to A shares has narrowed to 24 per cent from an average of 31 per cent over the past two years, according to a Hang Seng gauge that tracks the gap.
The Hong Kong stock exchange’s move to fast-track listings of high-quality Chinese companies already trading on the mainland has lured global investors seeking alternatives to US assets. The listings of these companies, generally the leading players in their industries, could help boost valuations in Hong Kong, which has struggled with a retreat by global investors over the past few years.
“Hong Kong’s market isn’t a closed one,” said Eva Yi, an analyst at Huatai Securities in Hong Kong. “Listings of good-quality companies will attract capital inflows, improve liquidity in the long run and narrow the discount. The A-H premium will converge further.”
Among the 155 firms with two listings, only three companies’ H shares command premiums to their A shares, according to data provider Shanghai DZH: CATL at 10 per cent, China Merchants Bank at about 2 per cent and biotech firm Wuxi AppTec at 0.4 per cent, the data showed.
