If the financial statements of red-chip enterprises need to be audited according to regulations, they shall be audited by qualified accounting firms in China and issue audit reports; Red-chip enterprises that adopt the same or overseas accounting standards shall be certified by qualified accounting firms and independently issue certification opinions.
In the Hong Kong stock market, red chips refer to the shares of listed companies listed in Hong Kong but directly controlled or held by Chinese-funded enterprises. Although red chip refers to the shares directly controlled or held by Chinese-funded enterprises listed in Hong Kong, this definition is still controversial to some extent. One school thinks that whether a stock belongs to red chips should be judged by whether its main profit comes from Chinese mainland; The most representative red chip index in Hong Kong, namely the Hang Seng Hong Kong Chinese Enterprises Index, is the representative of the other faction, which is determined by the equity ratio of Chinese shareholders.
The reason why red chips are called red chips mainly comes from two allusions that have been circulating in the market for a long time: the first allusion follows the story of a blue chip, which was mentioned in the article "Blue Chip". The biggest silver chip in the casino is blue, followed by red chips. So choose red as a slightly weaker stock than blue-chip stocks. The other version is more direct, because China's five-star national flag is mainly red, and the representative color of socialist countries is also red, so people habitually refer to the shares controlled by Chinese-funded enterprises as red chips.
Although the Hong Kong stock market is still dominated by blue chips, the number of shares traded and held by red chips is still small. However, with the acceleration of Chinese investment in Hong Kong, red chips are on the increase, and their influence is bound to increase, which cannot be ignored.
According to the relevant person in charge of a large Chinese investment bank, red-chip companies will be the main listed entities in the initial stage of the opening of the international board, and international accounting standards will be adopted. The financial disclosure cycle of listed companies should be adjusted according to the A-share standard. According to a related person from a large brokerage in Shanghai, it is estimated that more than 60 companies have expressed their intention to list on the international board to the relevant regulatory authorities.
In addition, major mainland investment banks are also actively "foraging" in Hong Kong. It is understood that large investment banks including CICC, CITIC Securities, BOC International and UBS Securities have reserved several "quite mature" international board projects.