Foreign exchanges woo Chinese companies

By Zhang Ran (China Daily)
Updated: 2007-06-11 15:12

Shape up

Listing overseas not only helps Chinese entrepreneurs raise funds, but it also gives them many other advantages. "In the short term, it's raising funds, but in the long term it wins you respect," said Zhang Xiangning, CEO and founder of Tixa Tech Group.

But the growing demand for Chinese companies also means a growing expectation from them in terms of quality and skills to manage their investor relations.

"All companies want a high P/E (price-to-earnings ratio). But what they often ignore is their post-listing performance," says Vicente Liu, chief representative of Asia Pacific and China Affairs from Cowen & Company, a US-based technology investment bank. "Only with healthy research coverage can investors be confident about the company."

Because of the immaturity of the mainland stock market, many Chinese companies have yet to form the habit of delivering regular financial reports and helping financial analysts monitor their performances.

Some investors may be put off by these crude practices, especially when the China concept is no longer a novelty in overseas capital markets and just being Chinese hardly guarantees investor attention anymore.

"The original 'China fever' has died down, and investors are starting to separate the wheat from the chaff," Liu warns.


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