I’m now answering myself, as no other answers came, as perhaps someone else is interested in the topic. I opened a small position on the Shenzhen Stock Exchange in China this morning, and before placing the order, I compared the Hong Kong Stock Exchange and the Shenzhen Stock Exchange based on the conditions shown by Mandatum Trader, using BYD Company Ltd. as an example stock.
Here are the general conditions for the Shenzhen Stock Exchange: lot size 100 shares (although I don’t know if it has practical significance, as the minimum trade size is still stated as 1 share), the price of one lot comes to approximately 4900 euros at BYD’s current price. The order must be a limit order, and an accepted order cannot be changed. Trading hours are Finnish time, 2 x 2 hours per day, from 4:30-6:30 and 8:00-10:00.
Costs are presented here such that the stock is first bought, then sold at the same price and with the same exchange rate, in which case the combined buying and selling costs are 0.71%.
Then to the Hong Kong Stock Exchange. There, trading is reportedly done in lots, meaning the minimum order size is 500 shares, and the euro price of one lot at BYD’s current price is approximately 26200 euros. The order can be of a type other than a limit order, and the exchange’s opening hours are longer, 4:30-7:00 and 8:00-11:00 Finnish time.
Using a similar formula as for the Shenzhen Stock Exchange, the combined buying and selling costs are 0.95%, and here the Hong Kong stamp duty is also payable.
As a result of this comparison, I ended up buying BYD from the Shenzhen Stock Exchange; the lot size was a significant factor, and it also had an impact that for some reason the stock is currently significantly more expensive in Hong Kong, 52.4 euros, while on the Shenzhen Stock Exchange the price is 49.1 euros, meaning the stock is 7% more expensive in Hong Kong.
Whether it’s worth buying BYD is a completely different matter; don’t do as I do, but do as you see fit. My reasons for buying BYD are that it is a company with potential in many respects to ride the wave of technological development to significant growth from its current state, it has diversified production in its own hands, and the P/E ratio of 26 is low given these factors. There is probably its own thread about the company here, where one can analyze in more detail what is true and probable and what is not, etc. I would, of course, gladly read other people’s views besides my own, which are quite close to selection methods based on a dart-throwing monkey compared to real analyses.
