Other companies with dual listings in the United States and Hong Kong also declined sharply.
The broad drop in China’s internet and tech stocks, which are usually listed both in New York and Hong Kong, was because of “worries that more companies will be put on the [US] list in the coming months,” said Citi analysts in a research report on Friday.
The HFCAA, which became law in December 2020, prevents companies that refuse to open their books to US accounting regulators from trading on US stock exchanges.
The names cited by the SEC on Thursday are fast-food company Yum China Holdings, tech firm ACM Research, biotech group BeiGene, Zai Lab, as well as pharmaceutical company Hutchmed.
They are the first among the roughly 270 Chinese firms that could be delisted from the New York Stock Exchange or the Nasdaq for not complying with the rules.
The SEC’s move triggered a sell-off in Chinese stocks in the United States on Thursday.
The Nasdaq Golden Dragon China Index, a popular index that tracks more than 90 Chinese companies that are traded in the United States, fell 10% on Thursday, the worst daily drop since October 2008.
On Friday in Hong Kong, Yum China lost 12%, while BeiGene shed 8.3%.
US stocks futures also moved lower, with Dow futures down 120 points, or 0.4%. S&P 500 and Nasdaq futures were down 0.5% and 0.7% respectively.
