[NTD News December 04, 2021, Beijing time]Chinese online ride-hailing giant Didi Chuxing recently announced its delisting from the New York Stock Exchange and moving to Hong Kong for listing, arousing public concern. Some analysts believe that Didi delinked from the US stock market, leaving behind four major problems.
Didi’s delisting accelerates the decoupling of China’s concept stocks from the U.S.
Didi Chuxing announced its delisting from the US on December 2, which may trigger a wave of delisting of Chinese concept stocks. Taiwanese media person and financial expert Huang Shicong told The Epoch Times that Didi’s delisting in the United States soon after listing in the United States will affect the integrity of China Concept Stocks and lead to a slowdown in overseas listing of China Concept Stocks in the future.
He believes that there are two main reasons for the complete delisting of Chinese concept stocks. The first is that the Chinese Communist Party officially wants them to return to Hong Kong or Shanghai to be listed; the second reason is that the United States implements a very strict audit mechanism and requires all Chinese companies. Comply with American auditing rules.
On the day Didi announced its delisting, the US Securities and Exchange Commission stated that Chinese companies listed in the US must disclose whether they are owned or controlled by government entities and provide audit inspection evidence.
Reuters reported that this regulation may accelerate the process of removing more than 200 Chinese companies from US exchanges.
Didi said it will list on the Hong Kong Stock Exchange as soon as possible to ensure that American shareholders can convert their shares into the company’s shares in Hong Kong.
Bloomberg reported on December 3 that people familiar with the matter disclosed that Didi plans to apply for a listing in Hong Kong around March next year.
However, listing in Hong Kong is more stringent than listing in New York, which is one of the reasons why Didi Chuxing chose to list in the United States.
Linus Yip, a Hong Kong strategist at First Shanghai Securities, said that listing in Hong Kong may take three to six months. It is unclear whether Didi can complete this operation within the deadline.
Investor damage
Since its listing in June, Didi’s share price has fallen by 40%. Financial expert Huang Shicong said that the delisting now means that investors will lose more money.
He said that whether investors are willing to exchange U.S. stocks for Hong Kong stocks depends on the price difference between listings in the United States and Hong Kong. But he is not optimistic about the Hong Kong stock market.
Huang Shicong said that due to the high political and economic risks in Hong Kong, “the intensity of the withdrawal of foreign capital from Hong Kong has been quite strong recently” and the Hong Kong stock market is the worst-performing market in the global stock market this year.
Will Didi offend Xi Jinping’s delisting to end trouble?
The financial media “Juzi ICON” once disclosed that Didi Chuxing was punished by the authorities not because of data security issues, but because Didi rushed to the U.S. to go public in disregard of the authorities’ persuasion and angered the regulators.
Two days after Didi went public in New York, it was subjected to stringent cyber security scrutiny by the CCP. 25 apps were removed from the shelves and they were required to stop new user registrations. After that, the Cyberspace Administration and other seven major departments jointly stationed in Didi to conduct security reviews, setting a historical record. Many commentators said that Didi’s life is hanging by a thread.
Xie Tian, a chair professor at the Aiken School of Business at the University of South Carolina in the United States, believes that Didi has funds from the Jiang faction behind it, and the purge may involve the conflict of interests of factions within the Chinese Communist Party. Xi’s faction wants to make a fortune, while the other faction may have to bleed to get things done.
Qin Peng, a current affairs commentator, said that Didi’s biggest trouble is to offend the CCP’s Cyberspace Administration of China, and that the power of the Cyberspace Administration of China does not come from relevant laws, but from the direct authorization of the top leader of the Chinese Communist Party, Xi Jinping.
(Reporter Luo Tingting Comprehensive Report / Chief Editor: Wen Hui)
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