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Strategies & Market Trends : Greater China Stocks
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From: Julius Wong12/7/2011 11:37:17 PM
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Chinese Firms Tired of Wall Street Shift to H.K.
By Mark Lee - Dec 7, 2011

Chinese technology companies that raised $7.8 billion from Wall Street investors in initial public offerings during the past 12 years have at least one good reason to delist in New York and take their business to Hong Kong.

Valuations appear to be significantly higher in Hong Kong. Perfect World Co. (PWRD), China’s fourth-biggest online games operator, trades at 3.9 times its estimated earnings in New York, while smaller rival NetDragon Websoft Inc. (777) is valued at 13 times in Hong Kong. Such disparities may push some technology companies to consider moving back east, said Victoria Mio, a senior portfolio manager at Robeco Group in Hong Kong.

More strict oversight by New York regulators and allegations of fraud from short-seller Muddy Waters LLC have suppressed the USX China Index of 174 Chinese stocks trading on Wall Street by 21 percent this year. The gauge trades at 12 times earnings, compared with 20 times for Hong Kong’s Hang Seng Composite Information Technology Index. (HSCIIT)

“I am tired of the U.S.,” Yang Tianfu, chief executive officer of Harbin Electric Inc. (HRBN), said in a phone interview. “We just couldn’t communicate with the investors.”

bloomberg.com
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