Chinese companies seek new financing by listing GDRs on SIX Swiss Exchange

Photo taken on July 28, 2022, at SIX Swiss Exchange shows a bell ringing ceremony for the listing of Global Depository Receipts (GDRs) of four Chinese companies. (Xinhua/Jiang Xuelan)

A press release of the SIX Swiss Exchange on Thursday showed that the capital raised by the four companies (aggregated placement volume in USD) with their GDRs from investors totaled 1.6 billion U.S. dollars.

GENEVA, July 31 (Xinhua) -- Four Chinese listed companies have sought to expand their ways of raising capitals overseas by listing Global Depository Receipts (GDR) on Zurich-based SIX Swiss Exchange, Switzerland's principal stock exchange, on Thursday.

A global depositary receipt (GDR) is a bank certificate issued in more than one country for shares in a foreign company. GDRs are most commonly used when the issuer is raising capital in the local market as well as in the international markets, either through private placement or public stock offerings.

A press release of the SIX Swiss Exchange on Thursday showed that the capital raised by the four companies (aggregated placement volume in USD) with their GDRs from investors totaled 1.6 billion U.S. dollars.

Dong Minyue, director of Department of Accounting and Control at Faculty of Business and Economics (HEC) at the University of Lausanne, told Xinhua on Sunday that Chinese Accounting Standards for Business Enterprises (ASBEs) is accepted by SIX Swiss Exchange, which is a major advantage for Chinese companies seeking to raise capital abroad.

Listing GDRs on the SIX Swiss Exchange will help broaden the shareholder structure and optimize the internationalization strategy of Chinese companies, said Dong, adding that it also offers a mutually beneficial opportunity of cooperation: Switzerland has attracted the world's largest offshore funds, international investors can invest in some of China's fast growing industry, meanwhile Chinese companies can cultivate a group of loyal long-term professional shareholders.

Wang Shihting, China's ambassador to Switzerland, said on Thursday at the ceremony that the listing will help Chinese companies improve their overseas financing capabilities and expand their brand awareness and influence.

It also showed that Chinese companies attach great importance to the Swiss capital market and its status as an international financial center, and are confident in the Swiss economy and the prospect of deepening cooperation between China and Switzerland, Wang said.

Gong Weiyun, General Manager of China Construction Bank's Zurich Branch, told Xinhua the successful listing means that the Chinese companies can raise more funds for global expansion and seek new overseas partners. For international investors, the listing offers them an opportunity to invest in China's fast-growing industries.

Thomas Zeeb, a member of Executive Board of SIX Swiss Exchange, said on Thursday that the practical regulations and the access to a huge pool of international investors are factors attracting Chinese firms.

Photo taken on July 28, 2022, at SIX Swiss Exchange shows a bell ringing ceremony for the listing of Global Depository Receipts (GDRs) of four Chinese companies. (Xinhua/Jiang Xuelan)

For Chinese firms looking to expand into Europe and establish local production facilities, the listing made a perfect gateway by "getting local investors to understand better what they're doing", Zeeb said.

The four Chinese companies are GEM, a Shenzhen Stock Exchange listed company active in the urban mining and new energy materials industry; Gotion High-tech, a Shenzhen Stock Exchange listed company focusing on battery power technology research, development and innovation; Keda Industrial Group, a Shanghai Stock Exchange listed building materials machinery manufacturer; and Ningbo Shanshan, a Shanghai Stock Exchange listed company engaged in the research and development, manufacture and distribution of lithium battery materials.