Chinese companies are listing on U.S. exchanges at a record pace, Bloomberg News reports.
The move to U.S. equity markets come even as U.S. market regulators promulgate rules that could make life difficult for Chinese companies.
U.S. initial public offerings this year have generated $6.6 billion for companies from Mainland China and Hong Kong — a record pace and eight times the same period in 2020, Bloomberg reported, citing its own data.
According to Bloomberg, the largest Chinese-company U.S. IPOs were electronic-cigarette-maker RLX Technology‘s $1.6 billion software company Tuya Inc.’s $947 million.
Other big years for Chinese companies holding IPOs in the United States have been 2001, 2007, 2011, 2014 and 2018, according to a Bloomberg-produced chart also based on the news and data service’s own research.
The current wave of interest comes even as the federal Securities and Exchange Commission has enacted rules requiring foreign companies listing on U.S. exchanges to give accountants greater access to audits. Companies failing to comply could be de-listed from U.S. exchanges.
“They would acknowledge this is a potential risk, and if something happens they might need to get prepared for a rainy day,” Stephanie Tang, head of private equity for Greater China at law firm Hogan Lovells, told Bloomberg. “But the risk itself would not prohibit those companies from going to the U.S., at least in the second half of this year or probably toward next year.”
“The U.S. still remains a magnet for the IPOs of Chinese technology companies,” Tang reportedly added. “Just in terms of the pipeline, I don’t see any pause to that. I think the pipeline is very strong.”
While U.S. exchanges come with certain regulatory headaches for Chinese companies, they also offer a level of liquidity successful firms are unlikely to encounter in their home market.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More