Wednesday, November 26, 2014   




Retail firms hot tip to lead conversions

Grace Cao

Monday, February 04, 2013

Retail companies are tipped to be among the most popular firms converting their mainland B shares into locally listed H shares, according to Deloitte Touche Tohmatsu.

Deloitte, one of the largest auditors of initial public offerings in Hong Kong last year, said consumption plays will become hot items due to their strong brand image.

"A sustainable profit growth and a large network are two top reasons why retail plays among B-share firms will prove to be solid candidates for H-share conversion," Deloitte partner Edward Au said.

It picked Shanghai-traded Lao Fengxiang and two wine makers - Yantai Changyu Pioneer Wine and Anhui Gujing Distillery, both listed in Shenzhen - to be hot favorites if they opt for B to H-share conversions.

ADVERTISEMENT

Deloitte earlier said it expected 41 out of 107 mainland firms that have both A and B shares to meet listing requirements of Hong Kong Exchanges and Clearing. It also said the 41 firms would convert their B shares into H shares this year.

"`These B firms might have the potential of upward valuation after converting into H shares," Au said, adding a 10 percent valuation premium is seen for mainland- traded liquor makers over their Hong Kong-traded peers.

But the recent jump in some B-share firms has also raised concerns any appreciation following conversion may be tempered. China International Marine Containers (2039) - the only firm so far to complete its B to H-share conversion - closed at HK$16.28 on Friday, up 68 percent from the last trading day of its B share in Shenzhen on November 29 last year.

China Vanke has gained 33 percent since announcing its conversion plan in early January. Livzon Pharmaceutical Group jumped by the 10 percent ceiling after revealing its conversion plan on Thursday.


© 2014 The Standard, The Standard Newspapers Publishing Ltd.
Contact Us | About Us | Newsfeeds | Subscriptions | Print Ad. | Online Ad. | Street Pts

 


Home | Top News | Local | Business | China | ViewPoint | CityTalk | World | Sports | People | Central Station | Spree | Features

The Standard

Trademark and Copyright Notice: Copyright 2014, The Standard Newspaper Publishing Ltd., and its related entities. All rights reserved.  Use in whole or part of this site's content is prohibited.   Use of this Web site assumes acceptance of the
Terms of Use, Privacy Policy Statement and Copyright Policy.  Please also read our Ethics Statement.