1、 Define but don't
Definition of A shares
The official name of A-share is RMB common stock. It is an ordinary stock issued by a company in China for subscription and trading by domestic institutions, organizations or individuals (excluding investors from Taiwan, Hong Kong and Macao) in RMB. A-share is not a physical stock. It uses paperless electronic bookkeeping, implements the "T+1" delivery system, and has a limit of up or down (10%). The participating investors are institutions or individuals in mainland China.
Definition of H shares
H-share, also known as state-owned enterprise share, refers to foreign shares registered in the mainland and listed in Hong Kong. (Because Hong Kong English is the first letter of Hong Kong, it is called H-share.) H-share is a physical stock, which is subject to the "T+0" delivery system, with no limit on the rise or fall. Institutional investors in China can invest in H shares, while individuals in mainland China cannot directly invest in H shares at present.
2、 Features
Characteristics of A-share
1. Issuance of ordinary shares in China that can only be subscribed by domestic investors in RMB.
2. The stock that accounts for the largest proportion of the outstanding shares issued by the company is also a stock with good liquidity, but most companies' A shares are not the most issued shares, because in addition to issuing A shares, most of China's listed companies also have non tradable state shares or state-owned legal person shares.
3. It is considered to be a kind of stock that only pays attention to profit distribution rights and does not pay attention to management rights. This is mainly because people who participate in A-share trading in the stock market pay more attention to the price difference of A-share trading than to other rights represented by them (Dr. Zou Dingbin thinks this is wrong. Dr. Zou Dingbin believes that many A-share investors in China also focus on participating in the management rights of A-share listed enterprises. The main reason why small investors seldom exercise the management rights is that there is not enough self invested capital to control the listed enterprises).
Characteristics of H shares
1. You can open a Hong Kong stock account through a Hong Kong based brokerage company in the mainland to operate H-shares. (such as Kaiji Securities, Hengfeng Securities, CMB Hong Kong, etc.)
2. At present, it is impossible to directly achieve H shares in domestic brokerage companies. Generally, these brokerage companies open accounts through Hong Kong established brokerage companies. Therefore, these brokerage companies will transfer funds in and out as agents. The detailed rules are different for each brokerage company.
3、 Difference in transaction mode
Trading mode of A-share
A-share is not a physical stock. It uses paperless electronic bookkeeping, implements the "T+1" delivery system, and has a limit of up or down (10%). The participating investors are institutions or individuals in mainland China.
T+1 is a stock trading system, that is, stocks bought on the same day can only be sold on the next trading day. "T" refers to the transaction registration date, and "T+1" refers to the day following the registration date. China's Shanghai Stock Exchange and Shenzhen Stock Exchange implement the "T+1" trading method for stock and fund transactions, and China's stock market implements the "T+1" trading system. Stocks bought on the day can be sold only on the next trading day. At the same time, "T+0" is still applied to the funds, that is, the funds withdrawn on the same day can be used immediately.
Due to the downturn of the domestic stock market, the A-share intraday trading mode initiated by State Street Investment is very popular at present.
Trading mode of H shares
The "T+0" delivery system is implemented, which means that you can buy on the same day and sell on the same day, without any limit on the rise or fall. Institutional investors in China can invest in H shares, while individuals in mainland China cannot directly invest in H shares at present.
4、 Differences in listing conditions
A-share listing conditions
1、 Qualification requirements
1. The issuer shall be a legally established and validly existing joint stock limited company. With the approval of the State Council, when a limited liability company is changed into a joint stock limited company according to law, it may publicly issue shares by way of public offering.
2. The issuer shall continue to operate for more than 3 years after the establishment of a joint stock limited company, except those approved by the State Council. If a limited liability company changes into a joint stock limited company as a whole according to the original book value of net assets converted into shares, the duration of continuous operation can be calculated from the date of establishment of the limited liability company.
3. The registered capital of the issuer has been paid in full, the property right transfer procedures of the assets used as capital contribution by the sponsors or shareholders have been completed, and there is no major ownership dispute over the major assets of the issuer.
4. The Issuer's production and operation comply with the provisions of laws, administrative regulations and the Articles of Association, as well as the national industrial policies.
5. The issuer's main business, directors and senior managers have not changed significantly in the past three years, and the actual controller has not changed.
6. The issuer's equity is clear, and there is no major ownership dispute over the issuer's shares held by the controlling shareholders and shareholders dominated by the controlling shareholders and actual controllers.
2、 Independent requirements
1. An issuer shall have a complete business system and the ability to operate independently directly facing the market.
2. The assets of the issuer are complete: a production enterprise should have a production system, auxiliary production system and supporting facilities related to production and operation, legally own the ownership or use right of land, plant, machinery and equipment related to production and operation as well as trademarks, patents and non patented technologies, and have an independent raw material procurement and product sales system; Non production enterprises shall have business systems and relevant assets related to operation.
3. The issuer's personnel independence: the issuer's general manager, deputy general manager, financial principal, secretary of the board of directors and other senior management personnel shall not hold other positions except directors and supervisors in the controlling shareholders, actual controllers and other enterprises controlled by them, and shall not receive salaries from the controlling shareholders, actual controllers and other enterprises controlled by them; The financial personnel of the Issuer shall not take part-time jobs in the controlling shareholders, actual controllers and other enterprises under their control.
4. Financial independence of the issuer: the issuer shall establish an independent financial accounting system, be able to make financial decisions independently, and have a standardized financial accounting system and financial management system for branches and subsidiaries; The Issuer shall not share bank accounts with the controlling shareholders, actual controllers and other enterprises under their control.
5. The Issuer's institutional independence: The Issuer shall establish and improve its internal operation and management organization, exercise its operation and management functions and powers independently, and shall not be confused with the controlling shareholders, actual controllers and other enterprises under their control.
6. Independent business of the Issuer: The business of the Issuer shall be independent of the controlling shareholders, actual controllers and other enterprises controlled by them, and there shall be no horizontal competition or unfair related transactions with the controlling shareholders, actual controllers and other enterprises controlled by them.
7. The issuer shall not have other serious defects in its independence.
3、 Standard operation
1. The Issuer has established and improved the system of general meeting of shareholders, board of directors, board of supervisors, independent directors and secretary of the board of directors in accordance with the law, and relevant institutions and personnel can perform their duties in accordance with the law.
2. The directors, supervisors and senior managers of the issuer have known the laws and regulations related to the stock issuance and listing, and the legal obligations and responsibilities of the listed company and its directors, supervisors and senior managers.
3. The directors, supervisors and senior managers of the issuer shall meet the qualifications prescribed by laws, administrative regulations and rules, and shall not be under any of the following circumstances: they are still prohibited from entering the securities market by the CSRC; Administrative punishment by the CSRC in the latest 36 months, or public condemnation by the stock exchange in the latest 12 months; The case has been put on file for investigation by the judicial organ due to suspected crimes or the case has been put on file for investigation by the CSRC due to suspected violations of laws and regulations, and there is no clear conclusion.
4. The issuer's internal control system is sound and effectively implemented, which can reasonably ensure the reliability of financial reports, the legitimacy of production and operation, and the efficiency and effectiveness of operations.
5. The issuer's articles of association have specified the approval authority and review procedures for external guarantees, and there is no illegal guarantee for controlling shareholders, actual controllers and other enterprises under their control.
6. The issuer has a strict fund management system, and may not have funds occupied by controlling shareholders, actual controllers and other enterprises under their control by borrowing, debt repayment, advance payments or other means.
4、 Financial index 1. The net profit of the last three fiscal years is positive and accumulatively exceeds 30 million yuan. The net profit is calculated on the basis of the lower one before and after deducting non recurring profits and losses. 2. The net cash flow generated by operating activities in the last three fiscal years accumulatively exceeds 50 million yuan; Or the accumulated operating income in the last three fiscal years exceeds RMB 300 million 3. The total share capital before the issuance is not less than RMB 30 million 4. The proportion of intangible assets (after deducting land use rights, surface aquaculture rights and mining rights) in the net assets at the end of the latest period is not more than 20% 5. There is no outstanding loss at the end of the latest period.
H-share listing conditions
According to the relevant provisions of the Stock Exchange of Hong Kong (hereinafter referred to as the "Stock Exchange of Hong Kong"), a joint stock limited company issued and listed by a mainland enterprise in Hong Kong, China shall meet the following conditions:
1、 Profitability and market capitalization requirements
The newly revised Listing Rules of the Stock Exchange of Hong Kong meet one of the following conditions for the profit and market value of joint-stock companies:
1. The company must have business records for three consecutive years under the management of the same management personnel. The total profit of the past three years is 50 million Hong Kong dollars (the profit of the last year is not less than 20 million Hong Kong dollars, and the sum of the profits of the previous two years is not less than 30 million Hong Kong dollars), and the market value (including all listed and unlisted securities of the company) is not less than 200 million Hong Kong dollars.
2. The company has business records for three consecutive years, its market value at the time of listing is not less than HK $2 billion, its revenue in the latest audited financial year is at least HK $500 million, and the total cash inflow from operating business in the previous three financial years is at least HK $100 million.
3. The market value of the company at the time of listing is not less than HK $4 billion and the revenue of the latest audited financial year is at least HK $500 million.
Under this condition, if the new applicant can prove that the company's management has been in the business and industry for at least three years, and the management and ownership have remained unchanged in the last year, the provisions on business records for three consecutive years can be exempted.
2、 Minimum Market Value Requirements
The expected market value of the new applicant at the time of listing must be at least HK $200 million.
3、 Market value and shareholding volume requirements of public shares
1. When the new applicant expects the securities to be listed, the market value of the shares held by the public must be at least HK $50 million. At any time, the shares held by the public must account for at least 25% of the issuer's issued share capital
2. If the issuer owns more than one class of securities, the total number of securities held by the public at the time of listing must account for at least 25% of the total issued share capital of the issuer; However, the percentage of the class of securities applying for listing in the total issued share capital of the issuer shall not be less than 15%, and the expected market value at the time of listing shall not be less than HK $50 million
3. If the issuer expects the market value to exceed HK $10 billion at the time of listing, the Exchange may accept a lower percentage between 15% and 25% at its discretion.
4、 Number of shareholders
1. There are at least 300 shareholders of the issuer company applying for listing in accordance with Articles 1 and 2 of the "Profitability and Market Value Requirements"; The issuer applying for listing according to Article 3 of "Requirements for Profitability and Market Value" has at least 1000 shareholders
2. The three public shareholders with the highest number of shares shall not hold more than 50% of the public shares when the securities are listed
H-share issuance procedure
1. The company applying for the issuance of H-shares shall submit an application to the local provincial people's government or to the relevant department in charge of enterprises under the State Council (directly under the State Council)
2. Local enterprises shall be recommended by the provincial people's government where the enterprise is located and enterprises directly under the central department to the CSRC by the relevant department in charge of enterprises (institutions directly under the State Council) in an official document. The people's government at the provincial level and the relevant department in charge of enterprises under the State Council may jointly recommend enterprises
3. The CSRC shall preliminarily determine the pre selected enterprises after soliciting the opinions of the competent department of the industry and submit them to the State Council for approval.
