1. The Magazine
  2. May 2007
  3. Milestones : Exchange Chalks Up First Chinese Listing

Milestones : Exchange Chalks Up First Chinese Listing

Author: Anita Hawser

GERMANY/CHINA

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Deutsche Börse

Although shares in Chinese companies have been traded on the Börse before, this is the first time a Chinese company has listed on the Frankfurt exchange. Historically, most Asian companies sought listings on US exchanges, but for smaller- to medium-size firms IPOing in the US is now perceived to be too expensive. European exchanges such as Deutsche Börse are hoping to pick up the slack.

Gongyou has listed on the Börse’s Open Market, which has the lowest regulatory requirements. If Chinese companies wanted to list on the exchange’s General Standard market, a spokesperson said, they would need to meet all the requirements expected of German companies.

Gongyou is registered in Singapore and has factories in Weihai City in the province of Shandong. Its listing on the Frankfurt exchange follows months of roadshows in China by the Deutsche Börse, which held an IPO seminar in Beijing. In an effort to attract Chinese companies and compete with other exchanges looking to do the same, the Frankfurt exchange is offering Chinese companies “low-cost” listings as well as the promise of a more liquid market for raising capital and the opportunity to build a global brand name and reputation by listing alongside well-known names such as Adidas, BMW, Puma, BASF and SAP.

According to a spokesperson, Deutsche Börse is in discussions with several other Chinese companies, which may list in Germany later in the year, and in November Frankfurt will host the German Equity Forum, which will feature presentations from various Chinese companies seeking capital.
Deutsche Börse already has listings from more than 70 countries, mostly within Europe and North and South America, but it is now setting its sights on another region: Asia-Pacific. The clearest sign yet of that change in focus came on March 30, when Deutsche Börse celebrated its first Chinese listing, Gongyou Machines Limited, which produces wood-processing machinery and electric motors. A private placement of E4.5 million of Gongyou’s shares will be traded on the exchange’s Open Market.

Anita Hawser