June 5, 2019 09:40 AM GMT MORGAN STANLEY ASIA LIMITED+ China Equity Strategy | Asia Pacific Jonathan F Garner EQUITY STRATEGIST [email protected] +852 2848-7288 The Rubio "Equitable Act" - Our Laura Wang EQUITY STRATEGIST [email protected] +852 2848-6853 First Thoughts Corey Ng, CFA EQUITY STRATEGIST [email protected] +852 2848-5523 Fran Chen, CFA A new bill sponsored by US Senator Marco Rubio has the EQUITY STRATEGIST potential to cause significant change in the listing domains of [email protected] +852 2848-7135 Chinese firms. After the market close in the US yesterday 4th June the Wall Street Journal published an Op-Ed by US Senator Marco Rubio in which he announced that he intends to sponsor the “Equitable Act” – an acronym for Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges. At this time the text of the bill has not been published and we are seeking additional information about its contents and likelihood of passing. However, our early reaction is that this has the potential to cause significant changes in the domain for listings of Chinese firms going forward with the potential for de- listing of Chinese firms on US exchanges and re-listing elsewhere (most likely Hong Kong). More generally we see this development as part of an increased escalation of tensions between China and the US on multiple fronts which should cap the valuation multiple for China equities, in particular in the offshore index constituents and US-listed parts of the universe. We provide a list of the potentially impacted China / HK names with either primary or secondary listings on Amex, NYSE or Nasdaq. Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. += Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to NASD/NYSE restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. 1 Table of China / HK names potentially impacted by the Equitable Act which have either primary or secondary listing on Amex, NYSE or Nasdaq Exhibit 1: China / HK names potentially impacted by the Equitable Act No. Bloomberg Code Stock Name No. Bloomberg Code Stock Name 1 YI US Equity 111 INC 101 GLG US Equity CHINA BAT GROUP INC 2 CSPCY US Equity 1SPC PHARMACEUTICAL-UNSPOADR 102 CNBI US Equity CHINA BCT PHARMA GROUP INC 3 VNET US Equity 21VIANET GROUP INC-ADR 103 CBPO US Equity CHINA BIOLOGIC PRODUCTS HOLD 4 QFIN US Equity 360 FINANCE INC -ADR 104 CBLUY US Equity CHINA BLUECHEMICAL-UNSP ADR 5 WBAI US Equity 500.COM LTD-CLASS A-ADR 105 CBPI US Equity CHINA BOTANIC PHARMACEUTICAL 6 JOBS US Equity 51JOB INC-ADR 106 CCCI US Equity CHINA CABLE & COMMUNICATION 7 WUBA US Equity 58.COM INC-ADR 107 CHGI US Equity CHINA CARBON GRAPHITE GROUP 8 AACAY US Equity AAC TECHNOLOGIES H-UNSPON AD 108 CCCL US Equity CHINA CERAMICS CO LTD 9 AAXT US Equity AAMAXAN TRANSPORT GROUP INC 109 CCGM US Equity CHINA CGAME INC 10 ABCR US Equity ABC RECORDS MANAGEMENT AND D 110 CHJI US Equity CHINA CHANGJIANG MINING & NE 11 ATV US Equity ACORN INTERNATIONAL INC-ADR 111 CHCC US Equity CHINA CHEMICAL CORP 12 ADMG US Equity ADAMANT DRI PROCESSING AND M 112 CHCJY US Equity CHINA CITIC BANK-UNSPON ADR 13 ADMV US Equity ADAMAS VENTURES INC 113 CCGY US Equity CHINA CLEAN ENERGY INC 14 ADGS US Equity ADGS ADVISORY INC 114 CCOZY US Equity CHINA COAL ENERGY-UNSPON ADR 15 ADVV US Equity ADVECO GROUP INC 115 CCCGY US Equity CHINA COMMUNICATI-UNSPON ADR 16 AGBAU US Equity AGBA ACQUISITION LTD 116 CICHY US Equity CHINA CONSTRUCT-UNSPON ADR 17 AGPYY US Equity AGILE GROUP HO-UNSPON ADR 117 CICOY US Equity CHINA COSCO HOLD-UNSPON ADR 18 AGMH US Equity AGM GROUP HOLDINGS INC 118 CCRC US Equity CHINA CUSTOMER RELATIONS CEN 19 ACGBY US Equity AGRICULTURAL BANK-UNSPON ADR 119 CDBT US Equity CHINA DASHENG BIOTECHNOLOGY 20 AAGIY US Equity AIA GROUP LTD-SP ADR 120 STVVY US Equity CHINA DIGITAL TV HOLDING-ADR 21 AIDA US Equity AIDA PHARMACEUTICALS INC 121 DL US Equity CHINA DISTANCE EDUCATION-ADR 22 AIRYY US Equity AIR CHINA LTD-SPONSORED-ADR 122 CDSG US Equity CHINA DONGSHENG INTERNATIONA 23 AMCN US Equity AIRMEDIA GROUP INC-ADR 123 CDGXY US Equity CHINA DONGXIANG GRP-UNSP ADR 24 AIVI US Equity AIVTECH INTERNATIONAL GROUP 124 CEA US Equity CHINA EASTERN AIRLINES-ADS 25 AJIA US Equity AJIA INNOGROUP HOLDINGS LTD 125 CEHD US Equity CHINA ELECTRONICS HOLDINGS 26 AJSCY US Equity AJISEN CHINA HLDS-UNSP ADR 126 CGYV US Equity CHINA ENERGY RECOVERY INC 27 ALAC US Equity ALBERTON ACQUISITION CORP 127 CSHEF US Equity CHINA ENTERPRISES LTD 28 BABA US Equity ALIBABA GROUP HOLDING-SP ADR 128 CHFFY US Equity CHINA EVERBRIGHT INTL-UN ADR 29 ALBBY US Equity ALIBABA HEALTH INFO-UNSP ADR 129 EGRNY US Equity CHINA EVERGRANDE GRP-UNS ADR 30 ALEDY US Equity ALLIED GROUP LTD-UNSP ADR 130 JRJC US Equity CHINA FINANCE ONLINE CO-ADR 31 WWIN US Equity ALLYME GROUP INC 131 CFOO US Equity CHINA FOODS HOLDINGS LTD-A 32 ACH US Equity ALUMINUM CORP OF CHINA-ADR 132 CHFHY US Equity CHINA FOODS LTD-UNSPON ADR 33 AMBO US Equity AMBOW EDUCATION HOLDING-ADR 133 CGXYY US Equity CHINA GALAXY SECURITIES-ADR 34 AOBI US Equity AMERICAN ORIENTAL BIOENGINEE 134 CGHLY US Equity CHINA GAS HOLDINGS LTD-ADR 35 SYUP US Equity ANBC INC 135 CHGS US Equity CHINA GENGSHENG MINERALS INC 36 AMCF US Equity ANDATEE CHINA MARINE FUEL SE 136 CHOPF US Equity CHINA GERUI ADVANCED MATERIA 37 ANNC US Equity ANNEC GREEN REFRACTORIES COR 137 CSNG US Equity CHINA GINSENG HOLDINGS INC 38 ANPFF US Equity ANPULO FOOD INC 138 CGA US Equity CHINA GREEN AGRICULTURE INC 39 ANPDY US Equity ANTA SPORTS PROD-UNSPON ADR 139 CHHE US Equity CHINA HEALTH INDUSTRIES HOLD 40 ATONY US Equity ANTON OILFIELD SERV-UNSP ADR 140 CHRI US Equity CHINA HEALTH RESOURCE INC-A 41 ASOE US Equity APOLLO SOLAR ENERGY INC 141 HGSH US Equity CHINA HGS REAL ESTATE INC 42 APM US Equity APTORUM GROUP LTD-CLASS A 142 CHSTY US Equity CHINA HIGH SPEED-UNSPON ADR 43 ALIF US Equity ARTIFICIAL LIFE INC 143 CHHQY US Equity CHINA HONGQIAO GR-UNSPON ADR 44 AEEX US Equity ASIA EQUITY EXCHANGE GROUP I 144 CIWT US Equity CHINA INDUSTRIAL WASTE MANAG 45 ATYM US Equity ASIA TIME CORP 145 CHNC US Equity CHINA INFRASTRUCTURE CONSTRU 46 ARMC US Equity ASIARIM CORP 146 IICN US Equity CHINA INTELLIGENCE INFORMATI 47 ASMVY US Equity ASM PACIFIC TECHNOL-UNSP ADR 147 CICC US Equity CHINA INTERNET CAFE HOLDINGS 48 ATAI US Equity ATA INC-ADR 148 CIFS US Equity CHINA INTERNET NATIONWIDE FI 49 ATIF US Equity ATIF HOLDINGS LTD 149 FRSHY US Equity CHINA JINMAO HOLDIN-UNSP ADR 50 JG US Equity AURORA MOBILE LTD-ADR 150 CJJD US Equity CHINA JO-JO DRUGSTORES INC 51 ATHM US Equity AUTOHOME INC-ADR 151 CLDC US Equity CHINA LENDING CORP 52 BCCMY US Equity BAIC MOTOR CORP LTD-UNS ADR 152 LFC US Equity CHINA LIFE INSURANCE CO-ADR 53 BIDU US Equity BAIDU INC - SPON ADR 153 CTXIF US Equity CHINA LINEN TEXTILE INDUSTRY 54 BCNN US Equity BALINCAN USA INC 154 CHLLY US Equity CHINA LITERATURE LTD - ADR 55 BKEAY US Equity BANK EAST ASIA LTD-SPONS ADR 155 CHLO US Equity CHINA LOGISTICS GROUP INC 56 BACHY US Equity BANK OF CHINA-UNSPN ADR 156 CGYG US Equity CHINA LONGYI GROUP INTERNATI 57 BCMXY US Equity BANK OF COMMUN-UNSPON ADR 157 CLPXY US Equity CHINA LONGYUAN POWER-ADR 58 BKJZY US Equity BANK OF JINZHOU CO LTD-UNSP 158 CMYYY US Equity CHINA MACHY ENGR CORP -UNSP 59 CMHZ US Equity BANNY COSMIC INTERNATIONAL H 159 CMFO US Equity CHINA MARINE FOOD GROUP LTD 60 BZUN US Equity BAOZUN INC-SPN ADR 160 CHND US Equity CHINA MEDIA INC 61 BBMPY US Equity BBMG CORPORATION - UNSPN ADR 161 CHSY US Equity CHINA MEDICAL SYSTEMS INC 62 BGNE US Equity BEIGENE LTD-ADR 162 CHME US Equity CHINA MEDICINE CORP 63 BJCHY US Equity BEIJING CAPITAL-UNSPON ADR 163 CIADY US Equity CHINA MENGNIU-UNSPON ADR 64 BJWTY US Equity BEIJING ENTERPRISES-UNSP ADR 164 CNMMY US Equity CHINA MERCHANTS-UNSP ADR 65 BEST US Equity BEST INC - ADR 165 CMAKY US Equity CHINA MINSHENG BANKING-ADR 66 BILI US Equity BILIBILI INC-SPONSORED ADR 166 CHL US Equity CHINA MOBILE LTD-SPON ADR 67 BSPM US Equity BIOSTAR PHARMACEUTICALS INC 167 CMCI US Equity CHINA MODERN AGRICULTURAL IN 68 BIQI US Equity BIQI INTERNATIONAL HOLDINGS 168 CBUMY US Equity CHINA NATL BDG-UNSPON ADR 69 BITA US Equity BITAUTO HOLDINGS LTD-ADR 169 CHNGQ US Equity CHINA NATURAL GAS INC 70 BHKLY US Equity BOC HONG KONG HLDS-SPONS ADR 170 CHNR US Equity CHINA NATURAL RESOURCES INC 71 BNSO US Equity BONSO ELECTRONICS INTL INC 171 BORN US Equity CHINA NEW BORUN CORP-ADR 72 BRNE US Equity BORNEO RESOURCE INVESTMENTS 172 CNER US Equity CHINA NEW ENERGY GROUP CO 73 BRQS US Equity BORQS TECHNOLOGIES INC 173 COE US Equity CHINA ONLINE EDUCATION-ADR 74 BSDGY US Equity BOSIDENG INTL HLDGS-UNS ADR 174 CUGCY US Equity CHINA ORIENTAL-UNSPON ADR 75 BRZV US Equity BREEZER VENTURES INC 175 CAOVY US Equity CHINA OVERSEAS LAN-UNSPN ADR 76 BEDU US Equity BRIGHT SCHOLAR EDUCATION-ADR 176 CHPXY US Equity CHINA PACIFIC INS-UNSPON ADR 77 BCAUY US Equity BRILLIANCE CHINA AUTOMOT-ADR 177 CPDU US Equity CHINA PEDIATRIC PHARMACEUTIC 78 BYDDY US Equity BYD CO LTD-UNSPONSORED ADR 178 SNP US Equity CHINA PETROLEUM