Zheng Quan Shi Bao·2025-11-07 00:32Core Viewpoint - The Hong Kong stock market is experiencing an unprecedented wave of privatizations, with over 20 companies delisting due to privatization as of November 6, surpassing the total of 15 for the entire year of 2024 [1][2]. Group 1: Privatization Trends - As of this year, 52 companies have delisted from the Hong Kong stock market, with 22 due to privatization, making privatization a mainstream method for delisting [2]. - The proportion of privatized companies among all delisted companies this year is 42.31%, compared to 30.61% in 2024 [2]. - Companies from various sectors, including real estate, consumer goods, finance, and technology, are involved in this trend, with notable names like HSBC Holdings and Geely Automobile announcing privatization plans [1][2]. Group 2: Reasons for Privatization - The primary reasons for privatization include low valuations that do not reflect the true value of companies, hindering their financing potential, and low trading volumes that diminish the significance of public trading [2][3]. - Strategic transformation needs are also a significant factor, as companies seek to restructure and focus on emerging industries, such as the case with Dongfeng Group's plans for its electric vehicle subsidiary [4][5]. Group 3: Market Implications - Privatization allows companies to avoid stock price volatility, reduce listing costs, and concentrate on long-term strategic transformations and mergers [5]. - The trend of privatization is expected to enhance the overall quality of the Hong Kong stock market by creating space for high-quality assets, despite potentially suppressing market activity in the short term [5][6]. - The privatization process can lead to better resource allocation and operational efficiency, as seen in HSBC's plan to privatize Hang Seng Bank while maintaining customer interactions [6].