Transforming passive hedging into active positioning, expectations for the return of Chinese concept stocks are heating up

Recently, under the backdrop of intensified U.S. regulatory policies and geopolitical tensions, the return of Chinese concept stocks has become a hot topic again. According to Wind statistics, since 2018, 33 Chinese concept stock companies have chosen to return to the Hong Kong stock market. Among them, 21 have completed dual primary listings, accounting for over 60% of the market capitalization; the other 12 companies have opted for secondary listings. Currently, most leading Chinese concept stocks have achieved listings in Hong Kong, with 73% (by market capitalization) of the top 1/4 Chinese concept stocks having realized listings in both markets, of which 45% have completed dual primary listings and 26% have achieved secondary listings in Hong Kong.

However, there are voices in the industry suggesting that the shortcomings of the Hong Kong stock market in terms of capacity, liquidity, and valuation discounts still need to be overcome. This situation is changing, as the Hong Kong dollar exchange rate has frequently touched the strong-side Convertibility Guarantee recently, prompting multiple interventions by the Hong Kong Monetary Authority, reflecting a surge of capital inflow. With the expansion of the Stock Connect in June and the introduction of liquidity support tools (LMM), the return of Chinese concept stocks may shift from merely seeking refuge to actively pursuing market-oriented layouts. (Securities Times)