Chinese firms embrace Swiss listings as deal pipeline swells



By Samuel Shen and Scott Murdoch

SHANGHAI/HONG KONG, Nov 14 (Reuters) - Battery maker Sunwoda Electronics Co's 300207.SZ debut on the Swiss stock exchange on Monday shines a light on how Chinese firms are tapping global markets outside the United States, as geopolitical tensions make it tougher to raise capital there.

Though the deals pale in size in comparison with the high-profile, multi-billion-dollar New York listings previously sought by Chinese firms, and involve only publicly traded firms, companies are nevertheless lining up for Swiss listings after China this year expanded the Shanghai-London Stock Connect scheme - a mechanism for cross-border investment - to include Switzerland and Germany.

Shenzhen-listed Sunwoda, the world's biggest consumer battery maker by installed capacity, raised $440 million in equity issuance on Swiss bourse SIX and share trading begins at 1400 GMT on Monday.

In total, eight listed Chinese companies, including Lepu Medical Tech 300003.SZ and battery maker Gotion High-Tech 002074.SZ , have raised more than $2.5 billion via the issuance of so-called Global Depositary Receipts (GDRs) on the Swiss bourse. More than a dozen Chinese companies have unveiled plans to follow suit, according to exchange filings.

The China-Switzerland Connect allows Chinese companies to raise capital by issuing and listing GDRs on Swiss bourse SIX. Swiss firms can issue Chinese Depository Receipts on the Chinese exchanges.

Issuance of GDRs in Europe provides an "additional channel" for Chinese companies to tap into international capital, said Mandy Zhu, head of China global banking at UBS UBSG.S . It comes at a time when listings in both the United States and Hong Kong have slowed.

Chinese listings in the U.S. ground to a halt last July as a result of a sweeping regulatory crackdown - just $152.5 million worth of Chinese listings have taken place in the United States so far in 2022, compared to $12.8 billion in 2021, according to Refinitiv.

The initial public offering (IPO) market in Hong Kong, a preferred venue for fundraising by Chinese companies, slumped 81% by volume during the January-September period, according to Deloitte, amid tensions between Beijing and Washington as well as market volatility.

UBS' Zhu said the Swiss bank is working with a number of Chinese companies with sizable GDR issuance plans, without disclosing names nor deal targets. She said UBS is also discussing with Chinese firms about listing in Frankfurt once rules are in place, so "our GDR mandates will keep coming".

Zhu said Sunwoda's "landmark" Swiss deal shows that Chinese companies with solid fundamentals can still whet appetite even in an adverse market environment, as long as underwriters can help identify the right investors. UBS was the joint global coordinator and bookrunner for the deal with Goldman Sachs.

The GDR issuance by Sunwoda generated strong demand from international investors in the bookbuilding process, according to UBS.

That enabled Sunwoda to exercise an option to expand its fundraising by nearly 50%, from an original issue size of $300 million, almost touching the upper limit approved by regulators, Zhu said.

Despite the brighter prospects, deal sizes have been comparatively small, with Gotion's $685 million Swiss listing the biggest so far under the Swiss connect scheme.

Drew Bernstein, co-chairman of Marcum Bernstein & Pinchuk, a China-focused accounting firm, said the U.S. market would remain the best option for Chinese companies, once regulatory hurdles were cleared, and a long-running Sino-U.S. dispute on company auditing was solved.

"Today, obviously, the companies have a lot of choices and the markets themselves have different things to offer," he said. But for many exchanges, "they don't really have scale. They don't have liquidity".
Reporting by Samuel Shen and Scott Murdoch; Editing by Sumeet Chatterjee and Kenneth Maxwell

Descargo de responsabilidades: Cada una de las entidades de XM Group proporciona un servicio de solo ejecución y acceso a nuestra plataforma de trading online, permitiendo a una persona ver o usar el contenido disponible en o a través del sitio web, sin intención de cambiarlo ni ampliarlo. Dicho acceso y uso están sujetos en todo momento a: (i) Términos y Condiciones; (ii) Advertencias de riesgo; y (iii) Descargo completo de responsabilidades. Por lo tanto, dicho contenido se proporciona exclusivamente como información general. En particular, por favor tenga en cuenta que, los contenidos de nuestra plataforma de trading online no son ni solicitud ni una oferta para entrar a realizar transacciones en los mercados financieros. Operar en cualquier mercado financiero implica un nivel de riesgo significativo para su capital.

Todo el material publicado en nuestra plataforma de trading online tiene únicamente fines educativos/informativos y no contiene –y no debe considerarse que contenga– asesoramiento ni recomendaciones financieras, tributarias o de inversión, ni un registro de nuestros precios de trading, ni una oferta ni solicitud de transacción con instrumentos financieros ni promociones financieras no solicitadas.

Cualquier contenido de terceros, así como el contenido preparado por XM, como por ejemplo opiniones, noticias, investigaciones, análisis, precios, otras informaciones o enlaces a sitios de terceros que figuran en este sitio web se proporcionan “tal cual”, como comentarios generales del mercado y no constituyen un asesoramiento en materia de inversión. En la medida en que cualquier contenido se interprete como investigación de inversión, usted debe tener en cuenta y aceptar que dicho contenido no fue concebido ni elaborado de acuerdo con los requisitos legales diseñados para promover la independencia en materia de investigación de inversiones y, por tanto, se considera como una comunicación comercial en virtud de las leyes y regulaciones pertinentes. Por favor, asegúrese de haber leído y comprendido nuestro Aviso sobre investigación de inversión no independiente y advertencia de riesgo en relación con la información anterior, al que se puede acceder aquí.

Utilizamos cookies para ofrecerle una mejor experiencia en nuestra web. Conozca más o cambie sus ajustes de cookies.

Advertencia de riesgo: Los CFD son un producto difícil de comprender y la CNMV cree que no es adecuado para inversores minoristas dada su complejidad y riesgo. Por favor, lea y asegúrese de que comprende completamente nuestra Declaración de riesgos.