中国企业希望在A股获得更高估值

Soaring Chinese Mainland stock markets are prompting some Chinese companies to look at de-listing in the US. But, rigid rules could make going public back home a challenge.

There was a time when Chinese CEO's lined up to break their company into the prominent US stock market. But, with a now surging market back home, a number of Chinese firms are looking to take their US-traded companies private -- hoping to fetch higher valuations.

This year alone, at least 14 US-traded Chinese companies, with a combined value of US$ 16.5 billion dollars, announced plans to delist their shares in the US. That, compared to just one US-listed Chinese company that did the same last year.

It's really the gap between the US market and China's 'A-Share' market -- stocks traded in Shanghai and Shenzhen -- that's prompting this exodus.

While there was once a time when New York was the most prominent place in the world to trade. Now, according to analysts at Credit Suisse, the average internet stock -- listed in Shanghai or Shenzhen -- trades much higher - a whopping 168 times earnings.

Compare that to Chinese companies in the US market which are trading at a discount, many for less than 20 times earnings. To Chinese investors, private ownership is really becoming a more attractive, less volatile option.

Among the mainland companies considering a move are social networking platform Renren, data center services provider 21 Vianet and Homeinns Hotel Group. They all believe the US market is really not recognizing the true value of their business' potential.

Pulling out of the US market isn't easy. There are often reviews by independent committees, fees and even an increase in payout to public investors. While plans have been announced, it is still be waiting to see how many of these companies actually negotiate a successful leave.

In the US it's clear investors want to see more activity by Chinese companies in the market. Recently, many were surprised when US index provider, MSCI, announced that it would not include China's A-Shares in its global benchmark emerging markets equity index. It first wants China to further liberalize its capital markets.

Chinese money in the US market is only a positive for American investors. After watching the success of Alibaba's US$ 25 billion IPO in September, US investors were hungry for more Chinese money to flood the market.

But, newer Chinese firms -- with less of a public profile -- are taking note of soaring valuations in a steadier market at home where investors, more familiar with the companies' business opportunities, would likely place a higher valuation on the shares. How this will affect the US market has yet to be seen.