Two of China’s biggest high-tech names, smartphone-maker Xiaomi and on-demand services platform Meituan Dianping, are finally available to stock buyers on the Chinese mainland. On Saturday the pair were officially included in a stock connect scheme that makes Hong Kong-traded stocks available to mainland-based investors, according to a statement on Shenzhen Stock Exchange website.
The move comes after operators at the Hong Kong, Shanghai, and Shenzhen bourses agreed in August on conditions permitting mainland traders to buy and sell companies like Xiaomi and Meituan, which have a dual-class share structure that was only recently permitted in Hong Kong.
Dual-class share structures are those in which stocks have weighted voting rights, giving company founders greater power over other individual investors. They enable founders to maintain significant control over the company after going public. China previously forbid such structures as well, but has changed its rules for its recently launched high-tech board.
Hong Kong first allowed dual-class companies to list in April 2018. But in July this year, mainland bourses temporarily excluded such shares from the stock connect program, citing potential risks.
With agreement finally reached on the issue, Xiaomi and Meituan have become the first companies to meet the conditions agreed upon by the two sides in August.
Trading volume of both companies spiked sharply higher on Monday, the first day the shares were available to mainland-based buyers. Xiaomi’s volume hit 226 million shares and Meituan’s reached 38 million that day, representing the second-highest volume in the past 60 days, according to data from Yahoo Finance.