Arnon Dror Blog
Arnon Dror
Hong Kong Stock Exchange IPO’s
Arnon Dror: Hong Kong as Asia’s New IPO Hot Spot
Recent reports show a 90 to 92% plummet of direct foreign investments from China to the United States in the first half of this year. Trump’s tirade is said to have cost American companies trillions worth of investment dollars. Arnon Dror attempts to figure out where all that money will go.
According to a report by Money.CNN.com, the Chinese government has begun to crack down on large Chinese conglomerates that seem to be overextending themselves as they take risky loans to fund new ventures abroad. As a result, and thanks in no small part to the campaign to discourage foreign ownership of US companies along with tariffs imposed on Chinese goods, much of the would-be capital should end up restricted within China for the time being.
One interesting case, however, is that a fair chunk of it may also be on its way to Hong Kong says Arnon Dror.
While US Markets await the initial public offering (IPO) of Uber and Airbnb, Arnon Dror notes that Hong Kong is expecting the entrance of three the world's 20 largest firms into their markets, which also happen to be Chinese owned. Slated to IPO this year in the Hong Kong Stock Exchange (HKEX) are Xiaomi, Meituan-Dianping, and Didi Chuxing, which bought Uber's China business.
Xiaomi
A global tech company with its hands in everything from power bank to MacBook clone laptops, Xiaomi may have started with all the negative connotation of being a Chinese brand, but it has since made a name for itself as the source of practical alternatives to tech flagships like the Samsung Galaxy S line, the FitBit, and even iRobot’s industry-creating Roomba. With 15,000 employees, the company reported a revenue of over $18 Billion last year.
Meituan-Dianping
Meituan-Dianping is a Beijing-based retail giant that resulted from a merger between the Groupon-like Meituan online retailer and Dianping companies. Together, they became the first company to serve more than 10 million orders per day. Since merging last year, the company has launched services for ride hailing, bike sharing, and B&B rentals among others. With 19,000 employees, Meituan-Dianping reported a revenue of $6.42 billion last year.
Didi Chuxing
Didi for short, this conglomerate made waves when it purchased Uber’s China business in 2016. Much like the two companies mentioned above, Didi has investments in many ventures with AI being chief among them. Didi had nearly 9,000 employees with a revenue of over $2 billion last year.
Arnon Dror sees this as just the tip of the iceberg as according to CNBC.com, “Chinese state-owned enterprises China Tower, a mobile phone infrastructure company, and Sinopec Marketing, a spin-off of <p>China Petroleum & Chemical's retail fuel business, are also expected to each hold $5 billion-plus listings in Hong Kong this year, according to Renaissance Capital.”
Arnon Dror notes that Hong Kong has the fourth largest IPO volume behind the US, China, and Germany, and can serve as an ideal access point to Chinese-owned and controlled companies. Southeast Asia is also one of the fastest growing regions in the world economy.
Recent reports show a 90 to 92% plummet of direct foreign investments from China to the United States in the first half of this year. Trump’s tirade is said to have cost American companies trillions worth of investment dollars. Arnon Dror attempts to figure out where all that money will go.
According to a report by Money.CNN.com, the Chinese government has begun to crack down on large Chinese conglomerates that seem to be overextending themselves as they take risky loans to fund new ventures abroad. As a result, and thanks in no small part to the campaign to discourage foreign ownership of US companies along with tariffs imposed on Chinese goods, much of the would-be capital should end up restricted within China for the time being.
One interesting case, however, is that a fair chunk of it may also be on its way to Hong Kong says Arnon Dror.
While US Markets await the initial public offering (IPO) of Uber and Airbnb, Arnon Dror notes that Hong Kong is expecting the entrance of three the world's 20 largest firms into their markets, which also happen to be Chinese owned. Slated to IPO this year in the Hong Kong Stock Exchange (HKEX) are Xiaomi, Meituan-Dianping, and Didi Chuxing, which bought Uber's China business.
Xiaomi
A global tech company with its hands in everything from power bank to MacBook clone laptops, Xiaomi may have started with all the negative connotation of being a Chinese brand, but it has since made a name for itself as the source of practical alternatives to tech flagships like the Samsung Galaxy S line, the FitBit, and even iRobot’s industry-creating Roomba. With 15,000 employees, the company reported a revenue of over $18 Billion last year.
Meituan-Dianping
Meituan-Dianping is a Beijing-based retail giant that resulted from a merger between the Groupon-like Meituan online retailer and Dianping companies. Together, they became the first company to serve more than 10 million orders per day. Since merging last year, the company has launched services for ride hailing, bike sharing, and B&B rentals among others. With 19,000 employees, Meituan-Dianping reported a revenue of $6.42 billion last year.
Didi Chuxing
Didi for short, this conglomerate made waves when it purchased Uber’s China business in 2016. Much like the two companies mentioned above, Didi has investments in many ventures with AI being chief among them. Didi had nearly 9,000 employees with a revenue of over $2 billion last year.
Arnon Dror sees this as just the tip of the iceberg as according to CNBC.com, “Chinese state-owned enterprises China Tower, a mobile phone infrastructure company, and Sinopec Marketing, a spin-off of <p>China Petroleum & Chemical's retail fuel business, are also expected to each hold $5 billion-plus listings in Hong Kong this year, according to Renaissance Capital.”
Arnon Dror notes that Hong Kong has the fourth largest IPO volume behind the US, China, and Germany, and can serve as an ideal access point to Chinese-owned and controlled companies. Southeast Asia is also one of the fastest growing regions in the world economy.
