Research On The Return Path And Economic Consequences Of Chinese Concept Stocks From The Perspective Of Market Timin

With the crisis of confidence in China Concept stocks caused by LKNCY financial fraud in 2020 and the enactment of the Foreign Companies Act in the United States,the risk of short selling and compliance of China Concept stocks in the United States has increased,and the living environment has become more difficult.At the same time,China’s listing regulatory system has been continuously optimized.In 2018,Hong Kong’s Listing System Optimization and 2019’s revision of the listing rules of the Science and Technology Innovation Board released the restrictions on dual-class shares and VIE structures,allowing China concept stocks with such structures to return to listing.In 2021,Hong Kong and the mainland revised the listing rules again to welcome the return of Chinese concept stocks with a more inclusive attitude.Under this circumstance,the return to listing of China concept stocks at this time is also in line with its own future development strategy.The business entities of such enterprises are all in China,and the business is centered in China and radiates to the world.Since the20 th National Congress of the Communist Party of China,China’s economy has been growing steadily,institutional construction has been optimized,and the business environment is getting better and better.At this time,China concept shares can return to enjoy the policies and demographic dividends released by China and get closer to consumers and investors.From the perspective of market timing,this paper chooses BILI,which is different from other undervalued Chinese companies in the US,as the case study.BILI is not undervalued in the US market when it returns to Chinese Hong Kong stocks,and the return path of BILI is special.It is the first TMT company to complete voluntary conversion from secondary listing in Hong Kong to dual primary listing,so it is unique to choose this case as the research object.Therefore,under the background of encouraging the return of Chinese concept stocks,this paper specifically studies the special path of BILI return to the Hong Kong capital market in the way of secondary listing and then from the perspective of market timing.The purpose is to provide reference for the Chinese concept stock enterprises that expect to reduce the risk of delisting in the United States and carry out long-term capital layout by returning to the Chinese Hong Kong stock market.The analysis points out that BILI chose this special return path mainly because of the stricter regulation in the United States,the existence of preferential policies and exemption clauses in Chinese Hong Kong stocks,the relatively loose market environment,BILI own financing needs and the requirements of future strategic layout;Secondly,it points out the economic consequences of BILI choice of this special path.For example,BILI return to Hong Kong for the second listing and conversion to dual primary listing have not achieved sustained positive reaction,and there are potential risks such as high proportion of marketing expenses and continued expansion of losses.But its return has broadened financing channels,optimized capital structure and promoted innovation investment.The conclusion of this paper is as follows: Based on market timing theory,regulation avoidance theory and information asymmetry theory,it is concluded that BILI return to Chinese Hong Kong for listing at this time is mainly based on the high valuation in the US capital market at that time and the emergence of their own financing needs,to avoid the risk of delisting in the US to a certain extent,and the return to listing can be more suitable for domestic consumers.Finally,based on the purpose of promoting the return of Chinese concept stock and the high-quality development of Chinese concept stock enterprises after the return,the following enlightenment is proposed: First,at the national level,we should continue to promote system optimization,road determines destiny,characteristics based on national conditions,and constantly improve our listing system on the road of Chinese-style modernization.We should embrace the return of more quality Chinese concept stocks with a more inclusive and holding attitude to help the high quality development of our economy.Second,strengthen the supervision of dual-class share structure.The top 20 reports pointed out that the innovation-driven development strategy,dual-class share structure can promote enterprise innovation to a large extent,but the design defects of the ownership structure should also be paid attention to.The regulatory authorities need to consider introducing a reasonable internal governance mechanism to protect the interests of outside investors from encroachment.Third,Chinese companies should seize the opportunity and choose the regression path rationally.