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Chinese companies see huge differences in valuation in between shares listed on the Hong Kong and Shanghai stock exchanges, with mainland investors often paying a premium for stock with the same voting rights and dividend. (Source photo by Reuters/Getty Images)
Market Spotlight

Why do Chinese investors pay more for the same shares?

Premium for mainland stocks over Hong Kong counterparts recently hit 7-year high

KENJI KAWASE, Nikkei Asia chief business news correspondent | China

HONG KONG -- Beijing Jingcheng Machinery Electric, a state-owned manufacturer of gas storage cylinders, may not be the most well-known name among Chinese listed companies. However, it is notable in one way: it tops the list of companies with the biggest price gap between their Hong Kong and mainland listed shares.

The company is listed both in Shanghai and Hong Kong. The A-shares on the mainland closed at 22.1 yuan on Friday, while the H-shares in Hong Kong were at 4.11 Hong Kong dollars, meaning mainland investors were paying 6.6 times as much.

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