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Explainer | What are ‘red chips’, and why are China’s state-owned companies such a big deal in Hong Kong’s stock market?
- There were 175 red-chip stocks on the Hong Kong stock exchange at the end of May, unchanged since the end of 2020
- The SOEs manage several popular names and brands in the city, though their ownership is less well-known
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China’s state-owned enterprises (SOEs) have made their presence felt in Hong Kong over the years. Some of their major businesses and brands are household names to the locals, but the owners behind them are less well-known.
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For example, supermarket chain City’super is controlled by a unit of China Resources (Holdings) following its purchase in August 2020. Disneyland’s Fantasyland on Lantau Island was built by China Overseas Holdings’ construction arm.
Many of these SOEs have also tapped into the city’s capital market for funds and stock listings.
Here are five of the biggest so-called Chinese red-chip stocks, or Hong Kong-listed, government-owned or controlled entities incorporated outside the mainland. There were 175 of them on the Hong Kong stock exchange at the end of May 2022.
BOC Hong Kong (Holdings)
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The entity is a holding company for Bank of China’s commercial banking business in the city. The lender has a long history of serving local customers ever since China’s third-largest banking group established its roots in 1917 and started to issue Hong Kong dollar notes in May 1994.
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