Tracking of Hong Kong Concept | Financial Reform in Guangdong-Hong Kong-Macao Upgraded Again, Dual Listing of Shenzhen-Hong Kong Established, Leading Securities Firms Expected to Soar (List of Concept Stocks Included)

On June 10th, the General Office of the CPC Central Committee and the General Office of the State Council issued an opinion on further promoting comprehensive reform pilot of Shenzhen, deepening reform and innovation, and expanding opening up. It proposed to support the coordinated development of credit financing for technology-based enterprises, deepen green finance reform, and for the first time clearly define the double listing path for enterprises in the Guangdong-Hong Kong-Macao Greater Bay Area to achieve listings in both Shenzhen and Hong Kong. With the explicit support of the General Office and State Council for the double listing of Guangdong-Hong Kong-Macao Greater Bay Area enterprises, more technology enterprises will seek an "A+H" structure in the future. Hong Kong-listed securities firms will directly benefit from the growth in IPO underwriting, trading commissions, and cross-border financial service demand. Relevant stocks include CICC (03908), CITIC SEC (06030), Huatai (06886), GF SEC (01776). In recent years, Chinese enterprises have accelerated their overseas expansion. Due to listing costs considerations, the mainstream model for A-share enterprises listing in the Hong Kong stock market is through secondary listings, known as the "A+H" model. Cao Gang, a partner at Zehao Capital, stated that the costs of dual listing in both locations are comparatively high and the listing standards for A-shares are more stringent, especially for red-chip structured enterprises. However, compared to Hong Kong stocks, A-shares have higher valuations and liquidity, although fundraising requires approval and lacks the convenience of Hong Kong stocks. As the mainland engine of the Greater Bay Area, Guangdong has laid a solid foundation for cooperation and deep integration, promoting the coordinated development of the three regions. At the "2025 Tsinghua Wudaokou Global Financial Forum" in May of this year, Shi Weigan, Executive Deputy Director of the Financial Committee of the Shenzhen Municipal Party Committee talked about the future of Shenzhen's local financial bureau's four key tasks, one of which is "further supporting and encouraging excellent enterprises in Shenzhen and the Greater Bay Area to list in Hong Kong, while also encouraging qualified Greater Bay Area enterprises listed in Hong Kong to return to the Shenzhen Stock Exchange." Regarding the policy of supporting Guangdong-Hong Kong-Macao enterprises to list in both Hong Kong and Shenzhen mentioned in this opinion, a financial director of a Hong Kong-listed technology company pointed out that this approach should highlight the financial interconnection of the Greater Bay Area, supporting domestic enterprises to list overseas and vice versa, especially for Hong Kong and Macao enterprises. Some companies listed on the Hong Kong stock market may have lower valuations and can potentially achieve higher valuations by returning to the Shenzhen Stock Exchange and raise more funds. The opinion mentioned deepening capital market reforms and supporting qualified Greater Bay Area enterprises to raise funds through a "Hong Kong + Shenzhen Stock Exchange" dual listing. This means that tech leaders on the Hong Kong stock market such as Tencent, Xiaopeng Motors, HUA HONG SEMI, may accelerate their return to A-shares. Securities firms, as the core intermediaries in IPO underwriting, will benefit from a wave of IPO returns. Firstly, investment banking businesses will see significant growth. The clarity of the double listing path indicates that more high-quality enterprises will consider listing in both Shenzhen and Hong Kong. From enterprise restructuring guidance to IPO underwriting, the entire IPO process will bring substantial business income to securities firms. Especially for securities firms deeply rooted in the Greater Bay Area, with location advantages and customer bases, they are expected to gain more high-quality project resources. Secondly, trading business scale is expected to expand. The increase in dual-listed enterprises will promote interconnection between Shenzhen and Hong Kong markets, driving overall trading activity. Securities firms, as market intermediaries, will benefit from improving market liquidity in brokerage and market-making businesses. Additionally, the repeated financing and M&A needs of returning listed companies will also bring continuous income to securities firms. Thirdly, there will be an increase in demand for cross-border financial services. Dual-listed companies will need to meet regulatory requirements in both locations, which will generate demand for professional services such as cross-border compliance and market value management. Securities firms with international business layouts can provide customers with comprehensive cross-border financial services covering listing, trading, and investment, creating new profit growth points. Finally, policy dividends will optimize the industry ecology. The improvement of the Shenzhen-Hong Kong dual listing mechanism will promote the deep integration of capital markets in both regions, creating favorable conditions for securities firms to innovate business models and expand service boundaries. In the long run, this will promote the securities industry towards higher quality development. Related concept stocks: CICC (03908): Leading investment bank for technology IPOs in the Greater Bay Area, deeply involved in IPOs of companies such as Tencent, Xiaopeng, and SenseTime, may take on more projects returning from Hong Kong to Mainland. With strong underwriting capabilities on both the Shenzhen and Hong Kong exchanges, it ranks among the top three in IPO underwriting scale in 2023, providing growth certainty for investment banking business under favorable policies. CITIC SEC (06030): Deepest layout in the Greater Bay Area, with headquarters in Shenzhen and a subsidiary in Hong Kong, experienced in Hong Kong IPOs, GDRs, and more. Abundant reserve of technology company clients, having led cases like HUA HONG SEMI, Semiconductor Manufacturing International Corporation's "A+H" dual listing, clear pipeline for future projects. Huatai (06886): Deeply rooted in the Yangtze River Delta and Greater Bay Area, rich in IPO resources in fields like biomedicine and semiconductors, can connect to Shenzhen Stock Exchange's SME and Sci-Tech Innovation Boards. Strong market-making business in Hong Kong stocks, the increase in "A+H" projects may boost trading commission income. GF SEC (01776): The primary advantage of the Greater Bay Area, with headquarters in Guangzhou and business center in Shenzhen, closely linked to local technology enterprises (such as Eve Energy Co., Ltd., Gree Electric Appliances, Inc. of Zhuhai affiliates). Among the top ten in Hong Kong IPO underwriting, under policy dividends, its share is expected to increase.