Deloitte China leads secondary listing services in Hong Kong in 2020

Firm has assisted in completion of six secondary listings  

The completion of the secondary listing of New Oriental Education & Technology Group Inc. (09901.HK) on Hong Kong Stock Exchange (HKEX) on 9 November underscored Deloitte China's leadership in assisting companies to make secondary listings in Hong Kong. New Oriental Education was the 9th company to complete a secondary listing in Hong Kong this year.

In April 2018, HKEX introduced the largest reform to its listing regime since the launch of H-shares. This included creating a new concessionary secondary listing regime for companies in innovative sectors. This year, the tense international situation and uncertainty in overseas capital markets boosted the return of overseas-listed Chinese companies to list in Hong Kong.

Deloitte China's achievements in secondary listing services in Hong Kong include:

  • Supporting the most companies (six of nine) to complete secondary listings in Hong Kong this year, including three mega deals each raising more than USD1 billion;
  • The largest share of proceeds from secondary listings by helping six companies raise a combined of HKD73.4 billion, equivalent to nearly 60 percent of all proceeds raised in secondary listings this year;
  • The largest share of market capitalization of new secondary issuers in 2020 (64%; by closing price on 1st trading day of each respective issuer); 
  • Expertise in meeting IPO service capabilities needs of clients from different industries – the six issuers came from innovative sectors including e-commerce, logistics, pharmaceuticals and education.

Source: Hong Kong Stock Exchange, Deloitte's analysis as of 9 November 2020.

Most notably – many of these companies first became Deloitte China clients when they initiated primary listings in the US. Their continued work with Deloitte China exemplifies our capabilities in serving our clients, and providing the right offering service solutions for clients at the right time.

Coupled with numerous extensive reforms to Mainland capital markets, including the launch of the SSE STAR Market, the introduction of the registration-based regime on the SSE STAR Market and ChiNext, fundraising channels for new economy and innovative businesses in the Mainland and Hong Kong have expanded significantly. To mitigate geopolitical risks and uncertainties, more Chinese companies are considering dual listings in the Chinese Mainland and Hong Kong, or other overseas markets and Hong Kong, which will provide tremendous opportunities for the Firm.

"As a professional services firm that embraces a multi-disciplinary model, audit and assurance remains one of the three key business practices of Deloitte China, together with tax and legal and consulting. We put great emphasis on the development of high quality audit and assurance services. This has enabled us to contribute to different capital markets. We are delighted by our stellar performance in secondary listing services in Hong Kong. Emerging dual-listing and return listing opportunities in the A-share market will help us reinforce our long-term leadership in audit services in China," says Patrick Tsang, chief executive officer of Deloitte China.

Thomas Chung, deputy chief executive officer and national audit & assurance managing partner of Deloitte China, adds that the Firm's achievement in secondary listing in Hong Kong is a direct result of Deloitte China's focus on enhancing its audit service quality over the past year: "With the registration-based regime about to expand from the SSE STAR Market and ChiNext to the Main Board in Shanghai and SME Board in Shenzhen, we are well positioned to capitalize on the vast opportunities presented by this important reform."

The six secondary listings* assisted by Deloitte China were as follows:

*The above images and introductions were taken from the prospectus covers and business description of the above secondary-listed issuers that are available at HKEX's website.

Deloitte China is dedicated to providing clients with professional, high-quality audit services, helping them continue to forge ahead in a challenging macro-economic and capital market environment. We also look forward to leveraging our experience and perspective in China and international market to help more companies diversify their strategic layouts, expand their capital scale, and accumulate advantageous resources.

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