LAOPU GOLD, MAO GEPING and other popular stocks deploy "H-share full circulation" experts interpret the implications: Beware of the lifting of restrictions and dumping stocks

LAOPU GOLD, MAO GEPING and other popular stocks deploy "H-share full circulation" expert interpretation of implications: beware of the lifting of restrictions and selling stocks

Recently, many popular stocks have applied for "H-share full circulation," which means that non-listed shares in mainland China are converted into listed H-shares. LAOPU GOLD (6181), MAO GEPING (1318) and other star semi-new stocks are also participating. However, against the backdrop of a sharp rise in Hong Kong stocks in the first quarter, stock prices have already surged. Experts interpret that H-share full circulation helps enhance the market value of shares while reflecting that shareholders have moved stocks to Hong Kong, believing that the lock-up period for some shares is about to end, or preparing to sell stocks.

LAOPU GOLD completes 24% conversion of domestic shares

So far this year, 23 Hong Kong stocks have promoted H-share full circulation, currently in the conversion phase. Recently, LAOPU GOLD has completed the conversion of 24% of domestic shares into H-shares, raising the H-share ratio to 80.28%. These converted shares include individual investor Chen Guodong from the previous period; as well as the controlling shareholders "Hongqiao Jinji" and "Tianjin Jincheng," mainly held by founder Xu Gaoming and the company's equity incentive platform.

MAO GEPING plans to convert H-shares reaching 46%

On the other hand, MAO GEPING, which has been listed for less than 4 months, has proposed to convert 228 million domestic shares into H-shares at an opportune time, accounting for 46.58% of the total shares, most of which come from the holdings of management, including Chairman MAO GEPING, as well as a previous investor.

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Many AI and pharmaceutical stocks apply for full circulation this year

Other stocks promoting full circulation include AI and intelligent driving concept stocks such as Youbixuan (9880), Zhixing Automotive Technology (1274), Youjia Innovation (2431), Shengtong Technology (2495), and Baiwang Co., Ltd. (6657); as well as biotech stocks such as Kelun Biotech (6990), Tongyuan Kang Pharmaceutical (2410), and Quanxin Biotech (2509). Many stocks are benefiting from the rising wave of Hong Kong stock valuation reassessment, especially LAOPU GOLD, which has surged 2.3 times this year, and has risen 19 times since its listing; MAO GEPING has also risen over 77%, and Youbixuan has increased by 49%.

Full Circulation Benefits Many, Helps Companies Enter Indices

H Shares full circulation originates from Chinese companies adopting the H Shares structure to list in Hong Kong, where domestic shareholders hold unlisted shares (domestic shares), resulting in "different shares for the same company." In recent years, after the central government opened the green light, these can be converted into listed H Shares. The main function of H Shares full circulation is to expand the market capitalization of the relevant shares, enhance trading opportunities, and increase the chances of inclusion in indices, while also aligning the interests of domestic shareholders with those of H Shares shareholders, aiding management decision-making.

Related News: LAOPU GOLD's listing in Hong Kong has increased its visibility as the "king of stocks," paving the way for expanding overseas markets and attracting financial clients.

Wu Lixian: Stock Price Rises Too Much, Early Shareholders May Exit

Wu Lixian, a securities strategist at Everbright Securities International, pointed out that domestic shareholders generally adopt a long-term holding attitude, growing together with the company. However, when the company goes public and the stock price rises significantly, "at a certain stage, they will change their minds, and it is impossible to hold forever," leading to plans for profit-taking. He believes that early investors in LAOPU GOLD have sufficient incentives to cash out, so the application for full circulation also likely indicates preparation for selling.

Semi-new Stocks Applying for Full Circulation Are Higher Risk

Wu Lixian emphasized that promoting H Shares full circulation is not necessarily a signal for shareholders to exit, urging investors to discern the underlying motives. "Simply put, if it is a major shareholder, it may be to enhance market value, and the chances of future sell-offs are lower; but if it is a small or medium shareholder, the chances are much higher," and he noted that semi-new stocks are generally riskier than those listed for many years He also reminded investors to pay attention to the proportion of H shares applying for full circulation. If a large portion is converted all at once, the supply will suddenly increase, often indicating significant selling pressure in the future.

LAOPU GOLD's lock-up period ends on June 27

Currently, the H shares converted by LAOPU GOLD have not impacted the market, as they are still within the lock-up period, which will end after June 27. The lock-up period for MAO GEPING will expire on December 9. According to Hong Kong's Listing Rules, the lock-up period for new shares is at least 6 months, after which both controlling shareholders and cornerstone investors can sell their shares, but controlling shareholders cannot lose their controlling status due to reduction in holdings during the second phase of the lock-up period, which lasts from 6 months to 12 months. For companies targeting "H share full circulation," according to the Company Law of China, the lock-up period for all pre-listing shareholders is 12 months.

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UBTECH's early shareholders sell after full circulation

In fact, early shareholders of the robotics concept stock UBTECH have repeatedly reduced their holdings in the Hong Kong market to cash out, paving the way for "H share full circulation." One of the controlling shareholders, "Shenzhen Evolution," originally consisted entirely of domestic shares and applied for full circulation shortly after the company went public, but was constrained by the lock-up period and remained inactive. After the one-year listing period, the controlling shareholders "split up," and Shenzhen Evolution, as an equity incentive platform, immediately began selling shares in the market, causing UBTECH's stock price to plummet by 50% within 4 days.

However, other domestic shares involved with UBTECH's controlling shareholders also converted to H shares through full circulation, but did not reduce their holdings. The company has repeatedly stated that since its listing, the core management team has never sold any shares directly held in the company, and these layers have also made an additional voluntary lock-up commitment for 12 months