Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

HK Type 4 license through Ballingal Investment Advisors Ltd. 

I'm a highly experienced sell-side analyst with in excess of 22 years of covering Asia Pacific equities, the past 19 years immersed in event strategies encompassing M&A risk arbitrage, directional long/short, stub trades and restructuring.  

My background also includes accountancy (liquidation/bankruptcy/receivership) earlier in my career and as a chief financial officer of a global commodity company based in the US and Mexico.

Pan-Asia Catalysts/Events

Full Circulation Of H Shares: Signs Of Life

Full Circulation Of H-Shares - July Update

Quiddity Advisors

Event-Driven

<p data-v-da61000a="" data-v-294dc056="">Back in June last year, I flagged (<em><a href="https://skr.ma/c7hcH" target="_blank" rel="noopener">Legend's Conversion of Domestic Shares</a></em>) 850mn shares entering <a href="https://www.smartkarma.com/entities/517" target="_blank" data-smartkarma-citation="entities:517:1" rel="noopener">Legend Holdings Corp H (3396 HK)</a>'s share registry via CCASS Participant ID A00002, as opposed to Shanghai and Shenzhen Connect participant IDs A00003 &amp; A00004 respectively.</p>
<p data-v-da61000a="" data-v-294dc056="">These shares represent the conversion of Legend's unlisted domestic shares (45% of the total shares out) into H shares under the China Securities Regulatory Commission's ("CSRC") Pilot Program.</p>
<p data-v-da61000a="" data-v-294dc056=""><a href="http://www.csrc.gov.cn/pub/csrc_en/newsfacts/release/201907/t20190716_359384.html" target="_blank" rel="noopener">According</a> to CSRC:</p>
<blockquote>
<p data-v-da61000a="" data-v-294dc056="">In order to make the non-tradable shares of overseas listed companies available for trading on the offshore market, the CSRC launched the pilot program of H-share full circulation in 2018 with approval from the State Council. <br><br>The non-tradable shares include the remaining shares held by domestic shareholders prior to the offshore listing, domestic shares offered after the offshore listing, and the unlisted foreign shares transferred from domestic shareholders to foreign shareholders. <br><br>In the pilot program, the 27 shareholders of <a href="https://www.smartkarma.com/entities/avichina-industry-tech-h" target="_blank" data-smartkarma-citation="entities:16315:1" rel="noopener">Avichina Industry &amp; Tech H (2357 HK)</a>, Legend Holdings, and <a href="https://www.smartkarma.com/entities/shandong-weigao-group-medical-polymer-co" target="_blank" data-smartkarma-citation="entities:1465:1" rel="noopener">Shandong Weigao Group Medical Polymer Co (1066 HK)</a> were among the first approved to convert a combined 7.1 billion non-tradable shares into floating H-shares on the Stock Exchange of Hong Kong.</p>
</blockquote>
<p data-v-da61000a="" data-v-294dc056="">The "success" of the pilot program offered useful experience for extending the program on a wider scale. The CSRC has now <a href="http://www.csrc.gov.cn/pub/newsite/zjhxwfb/xwdd/201911/t20191115_366034.html" target="_blank" rel="noopener">announced</a> it will push forward the “full circulation” reform of H shares.</p>
<p data-v-da61000a="" data-v-294dc056="">Full conversion provides the means for (mainly state) investors to exit or reduce their holdings, and improve the liquidity of the listed companies. But it can be viewed as an overhang on those companies given the go-ahead to convert.</p>
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Back in June last year, I flagged (Legend's Conversion of Domestic Shares) 850mn shares entering Legend Holdings Corp H (3396 HK)'s share registry via CCASS Participant ID A00002, as opposed to Shanghai and Shenzhen Connect participant IDs A00003 &amp; A00004 respectively.
These shares represent the conversion of Legend's unlisted domestic shares (45% of the total shares out) into H shares under the China Securities Regulatory Commission's ("CSRC") Pilot Program.
According to CSRC:

In order to make the non-tradable shares of overseas listed companies available for trading on the offshore market, the CSRC launched the pilot program of H-share full circulation in 2018 with approval from the State Council.   The non-tradable shares include the remaining shares held by domestic shareholders prior to the offshore listing, domestic shares offered after the offshore listing, and the unlisted foreign shares transferred from domestic shareholders to foreign shareholders.   In the pilot program, the 27 shareholders of Avichina Industry &amp; Tech H (2357 HK), Legend Holdings, and Shandong Weigao Group Medical Polymer Co (1066 HK) were among the first approved to convert a combined 7.1 billion non-tradable shares into floating H-shares on the Stock Exchange of Hong Kong.

The "success" of the pilot program offered useful experience for extending the program on a wider scale. The CSRC has now announced it will push forward the “full circulation” reform of H shares.
Full conversion provides the means for (mainly state) investors to exit or reduce their holdings, and improve the liquidity of the listed companies. But it can be viewed as an overhang on those companies given the go-ahead to convert.













Shandong Weigao Group Medical Polymer Co (1066 HK)

AviChina Industry & Technology H (2357 HK)

CSRC Green Lights Full Circulation Of H Shares

China Tower

CSRC Green Lights Full Circulation Of H Shares