What is a red-chip listing?

Refers to companies registered overseas, usually in Cayman, Bermuda or British Virgin Islands, where local laws and accounting systems are applicable, but the company's main assets and business are in Chinese mainland, such as Baidu, JD.COM, Ali, Tencent, Meituan, Didi and many other Internet companies. There are generally two modes of red chips, one is equity mode, also called red chips; The other is VIE mode, also called Little Red Chip. The main body of red chips is state-owned enterprises, which refers to the operation mode that domestic companies or institutions set up holding companies overseas (controlled by domestic companies or institutions), turn domestic business entities into subsidiaries of overseas holding companies, and finance or complete listing through overseas holding companies. The main body of small red chips is private enterprises, which refers to the operation mode that domestic natural persons set up holding companies overseas (controlled by domestic natural persons), turn domestic business entities into subsidiaries or variable interest entities (VIE) of overseas holding companies, and conduct financing or listing through overseas holding companies.