China Expert Benjamin Wey Explains Why U.S. Listed Chinese Companies are Significantly Undervalued
Benjamin Wey, the president and founding member of New York Global group advises businesses and corporations on strategic growth. Benjamin Wey expresses his opinions on how to invest in US..-listed, China-based companies.
- New York, NY (1888PressRelease) December 25, 2010 - Mr. Benjamin Wey, President of New York Global Group and Visiting Professor of Finance at several universities worldwide, has demonstrated that investing in US-listed, China-based companies can be highly profitable investments for investors. His positive views towards China related investments rest on several statistics and cases that illustrate why businesses are just starting to discover opportunities in investing in China's fast-growing economy through their U.S. listed Chinese companies.
According to Mr. Benjamin Wey, some of the world's fastest growing, most influential companies are based in China because of China's outstanding and explosive GDP growth of 9% per year for the last 30 years. Benjamin Wey discusses some of the important economic traits present in Chinese business trends and explains how these factors can affect world trade.
For example, US-listed, China-based companies represent less than 3% of all listings on the NASDAQ and NYSE. But, Mr. Wey says the reason may be somewhat different from what others think or believe. His research shows that in the first half of 2010 more than 190 Chinese companies became public on China's Shenzhen Stock Exchange. Moreover, these companies raised a total of $30 billion in capital - the highest amount in the world for growth companies. Within this time, the ChiNext has listed more than 100 new companies. These listings are currently at an average P/E multiple of 64 times. On the contrary, 200 China based companies listed on the NYSE and the NASDAQ have demonstrated similar earnings growth patterns and their shares are trading on average P/E multiple of only 7 times.
According to Mr. Benjamin Wey, many Chinese companies prefer to list on domestic Chinese stock exchanges than listing in the U.S. markets. US capital markets pose challenges to the China based companies due to language, culture and regulation barriers. Many Chinese companies with long histories choose to list on China's domestic exchanges, but China's domestic listing inefficiencies drive Chinese companies towards listing in the US. For various reasons, high growth Chinese companies often seek listings outside of China in markets such as the U.S., Hong Kong and Singapore as their primary destinations. Companies choose these places because these markets follow efficient, sponsor-driven and more transparent public listing processes.
According to Benjamin Wey, Chinese companies decide to list in the U.S. due to the founding principles of a free market economy in the United States, less government intervention in private enterprises, and the NASDAQ and NYSE's strong global reputation. In return, U.S. investors can invest in China-based, high growth companies with their shares listed on the familiar U.S. stock exchanges - a win-win for both issuers and investors.
About Benjamin Wey:
Mr. Benjamin Wey is the President and founding partner of New York Global Group. NYGG is a leading Wall Street middle market advisory firm on China related transactions. With headquarters in both New York and Beijing, NYGG has more than 80 experienced and expert professionals. Benjamin Wey and his NYGG have been advising China based corporate clients with their strategic growth for the past 16 years.
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