A Research On The A Shares And H Shares Price Difference For Cross-listing Companies

On August 27,1993,A share of Tsingtao Brewery(H shares in July 15th of the same year listed in Hong Kong)got listed on the Shanghai stock exchange,which has become the first Chinese cross listed company.Since then,an increasing number of domestic companies return to A share list after issuing H shares.As of December 2016,the number of A,H cross share listed companies has reached 89.Generally,A share of most A,H cross share listed companies is higher than the H shares.However,different shares differ in stocks.There are basically no difference between A and H shares of part shares.Part stocks'A shares are higher than the H-share price.Currently,most literature or papers analyze A,H stock price difference from the market level perspective.However,the difference between the different stocks of A,H stock price can hardly be explained.In view of this,this paper analyzes the A and H stock price difference from the perspective of the company's fundamentals.According to comparison of A,H share price data,this paper divided sample stocks into two groups of high and low premium stocks.By analyzing relevant literature,this paper adopts after deducting non recurring gains rate of return on net assets,net assets,the fundamentals of A shares,the present rate of sales,WCR/operating income,total assets turnover rate as fundamental factors of the empirical analysis and case analysis.In the empirical analysis,this paper adopts the method of descriptive statistics,double sample T test to verify whether there are significant differences between high and low premium group factors.Meanwhile,it adopts the method of multiple linear regression to test the correlation between the fundamental factors and A,H shares.In the case analysis,this paper selects a group of A,H shares with large stock difference(Fuyao and Luoyang Glass)to verify the significant difference between fundamentals of high premium stocks and low premium stocks,in which A and H shares with obvious change trend(Hua Dian International,AH shares parity gradually narrow)is adopted to verify whether changes of fundamental factors are caused by changes in the expected A,H shares.This paper found that:Under the premise that the current A stock market and the Hong Kong stock market has no effective arbitrage mechanism,enterprises with better fundamentals can obtain sound market recognition in the A stock market and Hongkong market,thus A and H share has little difference;enterprises with poor fundamentals can hardly obtain sound market recognition in the Hongkong market centered on institutional investors.In the A stock market,natural investors may receive higher valuation in the speculative trading concept when ignoring the fundamentals of the company,thus the A and H shares have larger difference.Meanwhile,according to the results of case analysis and empirical analysis in this paper,four fundamental factors of deducted non recurring gains rate of return on net assets,net assets,A shares present rate,the rate of sales are main cause of the difference between A and H share price in different stocks.