International Board: The Endless Wait 国际板：无休止的等待
Since China first announced its plans to launch an International Board several years ago, a group of overseas-based companies that do big business in China have been waiting patiently to list on the board to raise both cash and their profiles on the mainland. Many of those companies were genuine foreign firms, such as banking giants HSBC (HKEx: 5; London: HSBA) and Standard Chartered (HKEx: 2888; London: STAN); but an equally large group were Chinese companies like mobile carrier China Mobile (HKEx: 941; NYSE: CHL) and PC maker Lenovo (HKEx: 992), which incorporated overseas so they could list their shares in Hong Kong. Now it appears that at least some of the Chinese companies that wanted to list on the International Board are losing their patience with the slow progress, with word that Lenovo’s parent and telecoms carrier China Telecom (HKEx: 728; NYSE: CHA) may both be exploring more traditional A-share listings for some of their units.
The latest news on these 2 deals isn’t that significant by itself; but on a broader basis it could signal that both Chinese and foreign firms looking to list in China may start exploring other options following the endless delays for the launch of the proposed International Board.
Before we look at the latest Lenovo and China Telecom news, let’s step back and look quickly at the International Board’s rocky history. Plans for such a board, which would be based in Shanghai, first emerged as early as 2007 and 2008, and picked up momentum as the securities regulator openly talked about the plan. Optimists were looking for the board to launch as early as 2009.
But of course that year came and went without any launch, as China instead focused its efforts on a new enterprise-style board, the ChiNext, which launched in 2010. After that, China’s existing stock markets entered a prolonged downturn, causing the securities regulator to significantly slow down approval of new IPOs and also to indefinitely postpone plans for the International Board.
Against that backdrop, let’s return to the present and the latest news from Lenovo and China Telecom. In the bigger piece of news, Lenovo’s privately held parent, Legend Holdings, has said that the company wants to accelerate its previously discussed plans for a domestic IPO. (Chinese article) Legend founder Liu Chuanzhi said his company has been working on a broader group reorganization for the past year, and that it would now like to make an A-share listing as soon as 2014.
Legend’s main assets now include a wide range of businesses, from its original computer business to private equity, agricultural products, and real estate arms. Liu has talked about this offering for a while, so it’s not exactly new in that sense. But the accelerated plan does seem like a new development, and is most likely at least partly in response to the repeated delays in the International Board’s launch.
Meantime, the video subsidiary of China Telecom, E-Surfing Media, has also said it aims to make an A-share listing in the near term, after the unit recently became profitable. (English article) Again, I doubt this listing plan is a direct response to the International Board delays, and is more likely aimed at boosting the profile of one of China Telecom’s fastest-growing businesses.
But I do think this kind of offering is also at least partly aimed at giving domestic stock buyers a chance to invest in China Telecom, since the company has probably given up any hopes of making a domestic listing on the International Board anytime soon. Look for a handful of similar deals to potentially emerge this year, as big overseas-incorporated names like China Telecom and Lenovo lose patience with the International Board’s slow progress and seek other ways to list on China’s domestic stock markets.
Bottom line: New plans for domestic IPOs by affiliates of Lenovo and China Telecom may be partly in response to delays in the planned International Board, with more similar offerings likely in 2013.
Related postings 相关文章:
