The issuance of red chips, what does red chips mean

Red chip refers to ** with the concept of Chinese mainland registered outside China and listed in Hong Kong. "With the concept of Chinese mainland" mainly refers to Chinese holding and main business in Chinese mainland.

In the early days, red chips were mainly formed by the transformation of some Chinese-funded companies after acquiring small and medium-sized listed companies in Hong Kong, such as "CITIC Pacific". The red-chip stocks that have emerged in recent years are mainly formed after some provinces and municipalities in the mainland have reorganized their window companies in Hong Kong and listed them in Hong Kong, such as "Shanghai Industrial" and "Beijing Holdings".

Red chips are listed in Hong Kong with the concept of Chinese mainland and registered outside China**. The "Chinese mainland concept" mainly refers to Chinese holdings and main business in Chinese mainland. The early red chips were mainly formed after some Chinese companies acquired small and medium-sized listed companies in Hong Kong.

There are two main views on the definition of red chips, one view is that if the main business of a listed company is in Chinese mainland, and most of the profits come from this business, then the ** registered outside China and listed in Hong Kong is a red chip.

Another view is that it should be divided according to the amount of equity. If the majority of the shareholders' equity of a listed company comes directly from Chinese mainland, or has a mainland background, that is, is controlled by Chinese capital, then the ** registered outside Hong Kong and listed in Hong Kong is a red chip.

However, industry insiders also believe that there are still many technical and legal obstacles to the return of red chips to A-shares. First of all, the so-called red chips refer to those registered overseas and listed in Hong Kong with the concept of Chinese mainland. Currently, there are red chips in the Hong Kong, US, Singapore and UK markets.

The concept of red chips was born in the early 90s in the Hong Kong ** market. The People's Republic of China is sometimes referred to internationally as Red China, and accordingly, Hong Kong and international investors refer to those ** with the concept of Chinese mainland registered overseas and listed in Hong Kong as red chips.

Red chips are the opposite of "H shares", which are companies registered in mainland China, with a state-owned background, and approved by the China ** Regulatory Commission (CSRC) to list in Hong Kong. Listed in the Mainland** are called A-shares, so there will be a spread in the price of AH shares.

Red chips correspond to the Hang Seng Hong Kong China Enterprises Index, and H-shares correspond to the Hang Seng China Enterprises Index, which is the China Enterprises Index.

Red chips are issued by mainland enterprises registered overseas and listed in Hong Kong or their holding companies**. The company's main business scope is in China, and most of the revenue is also the same, so this overseas registered Hong Kong listed stock is a red chip stock. Or the vast majority of its shareholders' equity comes directly and indirectly from Chinese mainland, which is actually controlled by Chinese capital, but it ensures that it is registered overseas and listed in Hong Kong, then it is also a red chip world.

The initial red chips are usually formed by the restructuring of many Chinese-funded companies after merging and approving listed enterprises of small and medium-sized enterprises in Hong Kong, China, such as "Chunli CITIC Pacific". The red-chip stocks that have existed in recent years are usually formed after some provinces and cities in the mainland have reorganized their window companies in Hong Kong and listed them in Hong Kong, such as "Shanghai Industrial" and "Beijing Holdings". Red chips have become an important channel for domestic enterprises to enter the international financial market to raise funds in addition to B shares and H shares.

The rise and development of red-chip listings also has a very positive impact on the Hong Kong market.

Red chips usually refer to ** registered outside China but listed in Hong Kong, China, also known as red chips, such listed companies whose main business is in Chinese mainland, or controlled by Chinese-funded enterprises, so they also have a certain mainland concept. In the early stage of the development of red chips, it was generally a Chinese enterprise that acquired some small and medium-sized listed companies in Hong Kong. There are three main ways for red chips to return: CDR, Unicom and direct issuance of A-shares.

Blue chips can also be called "high-performance stocks", which refers to the stable surplus income, can regularly pay interest to shareholders of the listed company, this type of company is usually better performance, generally the size of its share capital is relatively large, performance and income are good, the image in the market is better, the long-term stock price trend is relatively stable. The word blue chip is mainly used in Western casino chips, because the chips are usually three colors, and the most valuable chips are blue, so it is extended to the market, which represents a high-quality company.

Red chips refer to those registered outside China and listed in Hong Kong with the concept of Chinese mainland**. "With the concept of Chinese mainland" mainly refers to Chinese holding and main business in Chinese mainland. Although red chips are also listed in Hong Kong**, there is an essential difference between them and H shares.

In addition, all red chips can be listed and circulated, while H shares can not be listed and circulated.

There will be two different views on red chips, one is divided according to business, if a listed company's main business is in China's mainland, the profit is basically the mainland. Moreover, this company is registered overseas and listed in Hong Kong, so it is considered a red chip.

It can also be divided according to the size of the equity. If most of the shareholders' equity of a listed company comes from the mainland, that is, the composition of its major shareholders is basically from the mainland or has a mainland background, and the company is registered outside China and listed in the Hong Kong market. Well, it's a red chip.

In addition to red chips, there are also blue chips, which refer to long-term stable growth, large-scale, traditional industrial stocks and financial stocks, **The market usually refers to those companies with better operating performance and stable and higher cash dividend payments** as "blue chip stocks".