Qingdao Haier to List in Germany

Home appliance giant Qingdao Haier Co. Ltd. said it will float shares on a newly established stock exchange in Germany, following the board’s recent launch as part of a broader effort to promote globalization of Chinese companies.

Qingdao Haier’s board approved an initial public offering (IPO) of up to 400 million so-called D-shares on the China Europe International Exchange, a Frankfurt-based exchange set up by the Shanghai Stock Exchange, Deutsche Borse and the China Financial Futures Exchange, according to a Wednesday stock exchange filing (link in Chinese). The listing would be the first on the young exchange, whose launch was formally announced in November, according to Reuters.

Based on Qingdao Haier’s most recent trading price, the offering could raise up to 7.1 billion yuan ($1.1 billion), assuming one D-share is equivalent to one share of Qingdao Haier’s currently listed Shanghai shares, often referred to as A-shares.

“In order to promote the company’s business development and deepen its globalization strategy, the company is preparing to make an IPO in the China Europe International Exchange,” Qingdao Haier said in the filing to the Shanghai Stock Exchange.

The China Europe International Exchange was launched this year, with an aim of helping Chinese companies raise money for expansion abroad. With a base in Germany’s financial capital, the market is specifically aimed at helping to raise the profile of such companies for European investors. The board will be mostly a listing ground for Chinese manufacturing and technology companies, according to reports at the time of the launch announcement last November.

The board is the latest vehicle allowing Chinese companies to concurrently list both at home and abroad, giving them access to domestic and international capital markets. Chinese companies can already list concurrently in Hong Kong and on one of the mainland’s two bourses in Shanghai and Shenzhen.

Some mainland-listed companies are also tradable in New York through the issue of American depositary receipts, also called American depositary shares. China is also preparing to roll out its own similar China depositary receipt (CDR) program, in a move aimed at luring offshore-listed Chinese companies like Alibaba Group Holding Ltd. and Baidu Inc. to make concurrent listings back at home.

China-listed A-shares are mostly off-limits to most foreign traders due to national restrictions. But international investors can purchase some A-shares through a program connecting the Shanghai and Hong Kong stock exchanges, and another connecting the Shenzhen and Hong Kong stock exchanges.

Contact reporter Yang Ge (geyang@caixin.com)