Chinese Companies Turn to Swiss Stock Market to Raise Money

Chinese companies looking to raise capital overseas have flocked to Switzerland’s principal stock exchange, the SIX Swiss Exchange. This follows the recent launch of the China-Switzerland Stock Connect program. The program has been in the works since 2019 when an MoU was signed. It allows Chinese companies to list their Global Depository Receipts (GDRs) on the exchange. A GDR is a bank certificate indicative of shares in a foreign company. It can be issued in more than one country.

On Thursday, GEM, Keda Industrial Group, Gotion High-Tech and Ningbo Shanshan became the first four major Chinese companies to list their GDRs in Switzerland. Collectively the companies raised about $1.6 billion.

Wang Hang, a partner at the international law firm Baker McKenzie’s Capital Markets practice in Beijing, revealed that the China Securities Regulatory Commission approved the issuance of shares in “just a few weeks”, which sometimes takes up to six months. It is reported that more than 13 “Chinese listed” companies are considering offering shares under the program.

The program is expected to improve the financing capabilities of Chinese companies in the foreign market while boosting their brand awareness and influence. It also increases the potential for overseas expansions and collaboration with international firms. The listing also provides international investors with the chance to tap into China’s flourishing industries.

Commenting on the liaison, SIX’s Global Head – Exchanges and Group Executive Board member, Thomas Zeeb said:

“Today is a great day in many respects and the long-standing and excellent cooperation of the Chinese and Swiss financial markets has reached an important milestone. It is a great pleasure for me to welcome four Chinese companies to SIX as part of the China-Switzerland Stock Connect program. This reflects the global significance of the Swiss financial center and its outstanding international connections. I wish the newcomers only the best for the future and I am convinced that they will find the best conditions with us to be able to achieve their future goals”.

The recently-listed companies are mainly active in the new energy and manufacturing industries. GEM, a Shenzhen Stock Exchange listed firm, is involved in urban mining and new energy materials. It listed 31,002,500 GDRs at a price of $12.28 each, resulting in a placement volume of $381 million. Each GDR represents 10 A-shares. Gotion High-tech another Shenzhen-listed company is involved in battery power technology research, development and innovation. They listed 22,833,400 GDRs at $30 each. Placement volume came to $685 million and each GDR represents 5 A-shares.

Keda Industrial Group is a Shanghai Stock exchange listed company that focuses on the manufacture and sale of building materials and machinery. It is also active in the clean energy sector. It listed 12,000,000 GDRs at the issue price of $14.43 each. The placement volume was $173 million and each GDR represents 5 A-shares. The fourth company, Ningbo Shanshan, is also Shanghai-listed and is involved in the research and development, manufacture and distribution of lithium battery materials. The company listed 15,442,300 GDRs at $20.64 each, resulting in a placement volume of $319 million. Each GDR represents 5 A-shares.