Chief financial officer Zeng Yan discussed with the participants on the recent resurgence of Sino US audit dispute and the second issue of China capital stock. In view of the audit dispute, he believes that China and the United States regulators are seeking solutions. There is no need for excessive panic in the market, and there is little impact on the well-developed China capital stocks. As the only representative of China capital stock enterprises attending the meeting, he said that Lexin’s business is mainly in China. If there is an opportunity to return to China’s capital market, it will actively consider the possibility and pay attention to protecting the interests of investors.
on August 10, U.S. Treasury Secretary mnuchin said that by the end of 2021, if listed companies from China and other countries do not comply with us accounting standards and submit audit papers to the public company accounting oversight board (PCAOB), they must delist from the US stock exchange. This is the latest dispute between China and the United States on the handling of audit manuscripts of China capital stock since 2002, and has aroused the concern of the capital market once again.
“audit disputes do not happen for the first time. Every time they occur, the market panics at the beginning, and then the information is gradually digested. The actual situation is not as bad as it seems. One performance is that a large number of enterprises still go to the U.S. stock market after assessing their earnings and risks. In addition, both the US president’s financial market working group’s suggestions on the handling of audit disputes and the positive response of the China Securities Regulatory Commission can be seen that both sides are trying to solve the problem. ” According to Zeng Yan.
“as a listed company in the United States, we will pay close attention to the development of the situation and protect the interests of investors in a timely manner. Our business entities are in China and are very confident in the development of China’s consumer and capital markets and are willing to contribute to their development. ” Zeng added.
China and the United States are actively exploring ways to solve the audit disputes. Previously, the U.S. presidential Working Group on financial markets, which was presided over by Mr. mnuchin, proposed that if the PCAOB could not obtain the audit manuscript due to the restrictions of the non cooperative jurisdiction (NCJ) government, it could conduct a joint audit through an audit firm recognized by the PCAOB. On August 4, the Chinese regulatory authorities sent an updated proposal to the other side according to the latest needs and ideas of the US side.
according to statistics, as of the end of July, the number of Chinese enterprises listed on the New York Stock Exchange and NASDAQ has reached 29, compared with only 9 in the same period of last year; the listed companies include Jinshan cloud, dada, ideal automobile, etc. These companies have raised a total of US $2.9 billion, an increase of nearly 30% over the same period last year.
referring to the return path of China capital stocks, Zeng Yan pointed out that the first path is to return to a shares after delisting. However, this process is long and needs to consider many factors, such as the change of actual controllers, the pace of domestic market review, the capital operation of RMB and US dollar, and the shareholder exit mechanism, which needs to be carefully selected; the second one is the secondary listing of Hong Kong shares, which is the Hong Kong stock exchange In this special period, the existence of this option has solved the concerns of most investors that China capital stock is restricted by the US capital market.
since this year, Jingdong, Netease and other leading Chinese companies have successfully listed in Hong Kong for the second time. Deloitte expects six to nine more Chinese capital stocks to be re listed in Hong Kong this year, including Parkson China and Huazhu group.
it is reported that the secondary listing of China concept shares in Hong Kong needs to meet certain conditions, including two consecutive years of listing in the United States, a market value of more than HK $10 billion, and a revenue of over HK $1 billion in the past fiscal year. Its own business model is innovative. However, only about 10% of the more than 200 companies in the United States may meet the requirements.
among them, UBS group, CITIC Lyon and other investment banks have pointed out that Lexin is the only company that may meet the requirements of Hong Kong’s secondary listing of China’s financial technology stocks listed in the United States. On August 10, Lexin announced that its users exceeded 100 million.