Several companies are vying to be the first China-headquartered business to go public in the U.S. since July, Financial Times writes.
That will test regulators’ willingness to accept listings in the wake of both countries’ clampdowns since then.
The report says there were six China- and Hong Kong-based groups that filed documents with the U.S. SEC for a Nasdaq IPO in January.
In addition, last week Meihua International Medical Technologies, which makes disposable medical devices, updated its filing.
All the deals are likely to be small, but they’ll be watched closely by analysts and lawyers for signs that there’s still a path forward for listings from China.
“They’re certainly not Alibaba, but nonetheless … the optics of it would send a broader message,” said Arthur Dong, a professor at Georgetown University’s McDonough School of Business and a specialist in Sino-U.S. business relations, according to FT. “If these pass, it would show there are still visible signs of life and it’s not a completely dead market for Chinese companies to list.”
In other news related to Chinese IPOs, an investigation into over 60 of them across the country, including Deutsche Bank AG’s Chinese securities venture, has left them on hold.
Regulators are looking into the law firms and underwriters behind them.
Twelve of them are from Shanghai’s STAR Market, the country’s tech hub, and 48 were from Shenzhen’s startup cluster ChiNext.
All 60 companies have hired one or more of three companies being investigated: Zhong De Securities Co. (a joint venture between Shanxi Securities and Deutsch Bank), accountancy firm SineWing and law firm King&Wood Mallesons, according to the report. All those companies had advised Leshi Internet Information and Technology, which had been charged in March with accounting fraud.
China has said its policy is “zero tolerance” on securities and accounting fraud.