Tencent, Alibaba, Baidu and NetEase Rumored to Return to A-Shares through CDR

Beijing-based media group Caixin Global reported that the list of companies issued China Depositary Receipts (CDR) has been released. The companies include BATJ (Baidu, Alibaba, Tencent, and JD.com), Ctrip, Sina Weibo, NetEase and Sunny Optical Technology. The first seven companies are China’s leading internet companies. Sunny Optical is regarded as new blue-chip stock. New blue-chip stocks refer to unlisted internet and economy giants, such as Foxconn, Didi Chuxing, Toutiao, and Meituan Dianping.

Pony Ma, Jack Ma, Robin Li

In the beginning of the 2000s, China Securities Regulatory Commission (CSRC) failed in its attempts to attract companies that went public abroad back to China. In 2008, CSRC put forward an international board aimed at winning over 300 red chip companies (mainland China companies incorporated outside mainland China and listed in Hong Kong). However, this attempt failed as well. The CDR aims to bring technology enterprises back home.

This is not the only move to attract companies to China’s capital market. On February 26, Xinhua News Agency said that China’s capital market should have BATJ.

On the afternoon of February 28, securities traders were told to report to the authorities if they find unicorns in four industries, including biotechnology, artificial intelligence, high-end manufacturing, and cloud computing. If the unicorn satisfies relevant provisions, the authority will review and deliberate their applications.

21st Century Business Herald learned from a large brokerage investment bank that the company did receive this notice on February 28.

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Recently, regulators have made it clear that they hope to keep BATJ in China. China’s capital market opened the “Green Channel”, an existing priority review pathway, to unicorns.

It is also reported that not all unicorns in the four industries apply to this regulation if they do not conform to the law, existing rules and regulations.

Yesterday, many China giants responded that they hoped to return to A-Shares.

NetEase: consider returning to A-Shares

Ding Lei, NetEase chairman and CEO

Ding Lei, NetEase chairman and CEO, responded to whether NetEase was willing to return to A-shares. He said, “We will certainly consider it. We are ready to go public at any time as we have been prepared for it.”

Baidu: As long as the policy allows, it hopes to return as soon as possible.

A-shares are shares of mainland China-based companies that were historically only available for purchase by mainland citizens since foreign investment was restricted.

When asked whether Baidu was willing to return to A-shares, Baidu Chairman and CEO Robin Li said that as long as the policy allows Baidu to return, they certainly hope to return as soon as possible. His words are as follows:

“We always hope that Baidu can be listed domestically. Most of our users are in China, our main market is China, and our main shareholders are also in China. The reason why we went to the United States to go public was because China’s policy did not allow Baidu to be listed at that time. Due to the variable interest entity structure, Baidu is a foreign invested company based on Chinese law. There are major policy obstacles hindering Baidu’s return to China. At any time the policy allows Baidu to return, we certainly intend to return as soon as possible.”

Sogou: Willing to return to A-Shares and follow the policy.

Wang Xiaochuan, Sogou President

Internet company Sogou President Wang Xiaochuan mentioned, “Sogou is optimistic about it and is willing to return to A-Shares. We will follow the policy.” Wang Xiaoquan said that Sogou aims to serve the Chinese netizens, and now as the policy is also favorable, Sogou is considering it.

This article originally appeared in NetEase Tech and was translated by Pandaily.