A study of mainland China real estate developers' behavior on Hong Kong financial market

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A study of mainland China real estate developers' behavior on Hong Kong financial market

 

Author: Yang, Zhiyuan
Title: A study of mainland China real estate developers' behavior on Hong Kong financial market
Degree: M.Sc.
Year: 2013
Subject: Real estate developers -- China.
Real estate business -- China.
Securities -- Listing -- China -- Hong Kong.
Securities -- China -- Hong Kong.
Hong Kong Polytechnic University -- Dissertations
Department: Faculty of Construction and Environment
Pages: vi, 51 leaves : ill. ; 30 cm.
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2646827
URI: http://theses.lib.polyu.edu.hk/handle/200/7170
Abstract: The real estate industry of China makes a significant contribution to the economic development. Nowadays, a large number of Chinese mainland property companies choose to be listed on HKEx and raising capital in the Hong Kong financial market has become an important financing choice. This paper analyses the typical H Share and Red Chip structure for listing on Hong Kong Stock Market. Then we use CAPM theory to calculate and compare the cost of capital on HKEx and China's Stock Market. The results show that the cost of capital for China's domestic listing companies is 15.05%, larger than those listed on HKEx which is 11.90%. In the last the paper compares the financial and operating performance before and after going public for the complete sample of the China's real estate companies listed in Hong Kong in recent years. The ROE, ROA, Net Profit Margin, Inventory Turnover and Total Debt to Assets Ratio after listing year all decreased significantly compared with the previous. This phenomenon can be explained by IPO effect. Most of the 34 sample companies are Red Chips. Evergrande real estate group is one of the biggest property companies in mainland China. We investigate the red-chip listing process of Evergrande last.

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