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It has been recognized by many private enterprises of Ningbo to “go public in Hong Kong so as to open up new financing channels, reinforce their growth momentum and prepare for going global”. As the reporter learned today from the 2004 Forum on Economic Cooperation between Ningbo and Hong Kong, private enterprises in Ningbo are now eager to be listed in Hong Kong, and a hot topic is how these private enterprises may utilize the capital market and get loans from the stock market following the full implementation of CEPA.
The 2-day-long 2004 Forum on Economic Cooperation between Ningbo and Hong Kong includes a forum on development strategies of private enterprises and capital market, where eminent specialists and scholars and government officials are invited to give lectures and advise on going public in Hong Kong. On the other hand, the private enterprises of Ningbo have long ago started to explore the possibility. In the wake of a Ningbo-based private enterprise going public in Hong Kong, another 10 are making necessary preparations. Six of them have already signed agreement with overseas intermediary agencies and 4 to 5 expect to make their debut on Hong Kong Stock Exchange next year.
Good financing capability is the main reason why most private enterprises favor going public in Hong Kong. Currently, private enterprises in Ningbo total near 90,000, accounting for 70% of the city’s gross economic volume. But due to such factors as inadequate channels, few of them have been able to be listed on the stock exchange, and the majority of them rely on bank loans for financing. The limited financing channels have gravely hampered the growth of these enterprises. In contrast, there are the mature financing market and huge financing potential in Hong Kong. According to Wang Liping, Chairman of Ningbo Guangbo Group, Guangbo is preparing to acquire a Hong Kong-based enterprise for back-door listing. He says being listed in Hong Kong may enable an enterprise to effectively solve its financing problem and set itself on the road of making big.
Another remarkable advantage of the capital market in Hong Kong is the internationalized support service. Hong Kong boasts the sound legal system, the international accounting and financial practices and readily available international intermediary agencies. As observed by Li Huang Ailing, by going public in Hong Kong, mainland enterprises including those in Ningbo may not only open up new financing channels but also learn advanced experience in human resource management and capital operations and prepare them for a wider market. Insiders in the industry have also spoken positively of the private enterprises scrambling to go public in Hong Kong. Personnel from China Securities Regulatory Commission also observed that the commission will set out to take measures and provide more favorable conditions for private enterprises to be listed on overseas stock exchanges. (Zhejiang Daily)
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