高盛：中国思考-中概股退市风险-重新受关注，更新投资者常见问题解答

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - Investor concerns regarding ADR de-listing risks have resurfaced due to escalating US-China trade tensions and regulatory risks highlighted by the America First Investment Policy [1][9] - The US-China trade tensions have reached unprecedented levels, with effective US tariffs on Chinese imports reaching 107% and Chinese tariffs on US goods at 144% as of April 2023 [9] - The US-China Relations Barometer indicates that bilateral frictions are at two-year highs, contributing to increased volatility in global capital markets [8][9] - The potential for US investors to liquidate approximately US$800 billion worth of holdings in Chinese stocks if banned from investing in Chinese securities has been highlighted [9] Summary by Sections ADR De-listing Risks - ADR de-listing risks have returned to the forefront due to regulatory gaps on audit inspections between the US and China, particularly under the Holding Foreign Companies Accountable Act (HFCAA) [11] - The SEC identified five Chinese stocks as Commission-Identified Issuers (CII) under the HFCAA in March 2022, leading to a significant drawdown in the ADR index [11] - The PCAOB and CSRC signed an agreement in August 2022 to allow PCAOB access to audit papers of Chinese ADRs, which has eased some concerns [11] Mechanisms for De-listing - De-listing can be voluntary or involuntary, with involuntary de-listing typically occurring faster and putting pressure on share prices [17] - Forced de-listing can be triggered by accounting fraud, non-compliance with HFCAA, US sanctions, or violations of Chinese regulations [17] - A simplified process for de-listing includes investors selling before the last trading day and potentially trading on the OTC market [17][20] Share Fungibility Mechanism - The share fungibility mechanism allows for the conversion between ADS and HK shares, which is effective for companies with dual primary listings or ADR/HK secondary listings [25] - The conversion process generally takes two business days, and no new shares are created during this process [25][24] Impact on Investors - US institutional investors currently hold around US$830 billion in Chinese stocks, with significant potential selling pressure if forced to liquidate [32][34] - Retail ownership in Chinese ADRs is estimated to be over US$370 billion, with companies having high retail ownership facing stronger selling pressures [32][34] - Passive investment vehicles like ETFs may be significantly impacted by ADR de-listing, particularly those with high exposure to ADRs without HK listings [43]