An empirical study on financial performance evaluation of Chinese A and H cross-listed companies
by Yanli Zhu; Binrang Zhu; Jingyi Lang
International Journal of Business Performance Management (IJBPM), Vol. 20, No. 3, 2019

Abstract: With the improvement of China's economic openness and the perfection of capital market, an increasing number of mainland Chinese companies have been listed on both the mainland stock exchanges (A-share) and the Hong Kong Stock Exchange (H-share). Facing intense international competition, it is urgent for the cross-listed companies to improve their financial performance and further achieve sustainable development. This paper evaluates the financial performance of Chinese A and H cross-listed companies based on a list of financial indicators in 2016 using the factor analytic approach. In this paper, we construct a new financial performance evaluation system based on the financial data of these companies. A comparison of different industries, ownerships and economic zones is also conducted. Our empirical findings include: First, we extract four aspects of ability, including profitability, operation ability, debt-paying ability and development ability, to comprehensively reflect the financial performance of Chinese A and H cross-listed companies. Second, we confirm that there are significant variations in the financial performance of Chinese A and H cross-listed companies among industries, ownerships and economic zones. Lastly, some suggestions are further provided in accordance with the evaluation results to improve the financial performance of Chinese A and H cross-listed companies.

Online publication date: Tue, 03-Sep-2019

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