Small players may cash out in H-share conversion

A rush by newly listed Chinese firms in Hong Kong including Laopu Gold (6181) to make all their H shares tradable may lead to small investors cashing out, analysts warn.

Many Hong Kong-listed Chinese firms have shares held by domestic investors which are not tradable. This year, 23 of them have filed for or completed the process of making these shares tradable under the H shares full circulation scheme.

They include hot stocks such as jeweler Laopu Gold, beauty brand Mao Geping Cosmetics (1318) and Ubtech Robotics (9880), involving 40 million, 228 million and 42.17 million shares, respectively.

The conversions will enable small shareholders to reduce their holdings and cash in part of their gains, especially if these firms transfer these shares in bulk, said Kenny Ng Lai-yin, securities strategist at Everbright Securities International.

Staff reporter