Analysis of the Significance and Impact of Han's CNC H-Share Issuance Filing

Han’s CNC (301200.SZ) is Shenzhen Han’s CNC Technology Co., Ltd., mainly engaged in the R&D and manufacturing of CNC equipment such as industrial mother machines. According to the latest data [0], the company currently has a market capitalization of approximately 4.823 billion USD, a share price of 113.35 yuan, and a price-to-earnings ratio of 79.82 times. Since 2025, the company’s stock price has performed strongly, with an annual increase of 229.12%.

Obtaining the overseas issuance and listing filing notice issued by the China Securities Regulatory Commission (CSRC) means that Han’s CNC’s H-share issuance plan has received formal recognition from the regulatory authorities, which is a key step in the company’s internationalization strategy.

H-share issuance will open up overseas financing channels for the company, which will help:

• Reduce financing costs
  : The financing cost in the Hong Kong market is relatively low
• Optimize capital structure
  : Improve financial indicators through equity financing
• Enhance international brand awareness
  : Listing in Hong Kong increases international influence

According to online search results, PCB industry chain enterprises are “collectively moving southward”. As a key supporting enterprise in the industry chain, Han’s CNC’s listing in Hong Kong is in line with industry trends [1]. This will help the company better serve overseas customers and support its globalization strategy.

According to research data, A-shares have a systematic premium relative to H-shares, mainly due to:

: The average daily trading volume of A-shares is over one trillion yuan, while that of Hong Kong stocks is only about 100 billion Hong Kong dollars. The liquidity difference directly affects valuation [2].

:

• A-shares: Mainly mainland investors, with a high proportion of retail investors.
• Hong Kong stocks: Global investor participation, with a large proportion of institutional investors, and more moderate pricing.

: A-shares are relatively closed, while Hong Kong stocks are fully open for global allocation [2].

The Hang Seng AH Premium Index currently fluctuates in the range of 120-140, meaning that A-shares have an average premium of 20%-40% relative to H-shares [3].

Historical data shows:

• Since 2015, the AH Premium Index has fluctuated in the range of 120-140 most of the time.
• At its highest, it was close to 160 (premium of about 60%).
• Currently, around 120 is a relatively reasonable level.

It is worth noting that since the beginning of 2024, the AH premium has shown a trend of decline, mainly due to:

• The negative impact of foreign capital outflows has decreased.
• Southbound funds provide liquidity support for Hong Kong stocks.
• Domestic capital has increased freedom in allocation choices between A-shares and Hong Kong stocks [3].

H-share issuance will increase the company’s share circulation in the Hong Kong market, which will help:

• Expand the investor base.
• Improve stock liquidity.
• Reduce the risk of relying on a single market.

• Southbound capital inflow
  : Mainland investors can invest in H-shares through Stock Connect.
• International capital participation
  : Attract overseas institutional investors to allocate.
• Role of arbitrage mechanism
  : Promote price convergence between the two markets.

According to CICC’s estimates, nearly 50 A-share companies plan to list in Hong Kong, with potential liquidity demand of about 150-180 billion Hong Kong dollars, equivalent to about 0.7 days of the average daily turnover of the Hong Kong Stock Exchange’s main board [2]. This may cause certain supply pressure on the market in the short term.

• International platform
  : Build an offshore financing platform to serve overseas business expansion.
• Optimization of foreign exchange management
  : Solve foreign exchange control issues faced in overseas investments.
• Global supply chain layout
  : Support the establishment of production bases in Southeast Asia and other regions.

• Valuation pressure
  : The Hong Kong stock market has relatively low valuations for manufacturing enterprises.
• Information disclosure requirements
  : Need to comply with regulatory requirements of both places simultaneously.
• Investor education
  : Need to clearly communicate the company’s value to international investors.

1. Value revaluation opportunity
   : H-share listing may trigger a revaluation of the company’s value.
2. Liquidity improvement
   : Dual listing enhances overall liquidity.
3. Arbitrage space
   : Pay attention to the spread opportunities between AH shares.

1. Valuation discount risk
   : H-share issuance may face a valuation discount relative to A-shares.
2. Dilution effect
   : New share issuance may dilute earnings per share.
3. Market volatility
   : Increased impact from Hong Kong market sentiment.

Han’s CNC obtaining the H-share issuance filing is an important milestone in the company’s development history, marking that its internationalization strategy has entered a substantive stage. From the valuation perspective, although there may be valuation differences due to the AH premium in the short term, in the long run, dual listing will enhance the company’s international reputation, optimize its financing structure, and improve liquidity performance.

With the in-depth advancement of RMB internationalization and capital market opening, the AH premium is expected to continue to converge, providing investors with more value discovery opportunities. For high-end manufacturing enterprises like Han’s CNC, international layout will help them better participate in global competition and achieve long-term sustainable development.

[0] Jinling API Data
[1] NetEase Finance - “PCB Industry Chain ‘Collectively Moving Southward’, Leading PCB Plating Material Company Chuangzhixinlian Obtains Filing Approval!” (https://www.163.com/dy/article/KGJCJTQ405317SYF.html)
[2] Xinhua News Agency - “Behind the Boom of A-Share Companies Listing in Hong Kong: Market Game of Same Shares Different Prices” (http://www.news.cn/finance/20250409/b1376046136c4a35beb8e898eb0020f2/c.html)
[3] CICC Research Department - “New Paradigm for Comparing A-Shares and Hong Kong Shares” (https://finance.sina.com.cn/stock/stockzmt/2025-03-03/doc-ineniuqs0983620.shtml)