The boom in Chinese companies’ listing in the United States suddenly comes to a halt
(Bloomberg) – At least three Chinese companies have suspended their plans to list in the United States, announcing a slowdown in what has been a record start to the year for initial public offerings by companies on the mainland and in Hong Kong. , a podcaster and a cloud computing company are among popular Chinese companies refusing to launch an American float, discouraged by recent market downturns, soured investor sentiment towards fast-growing companies and poor beginnings of peers like Waterdrop Inc. Hello Inc., Ximalaya Inc. and Qiniu Ltd. are postponing their investor order-taking plans, even though the three had filed documents with the Securities and Exchange Commission more than two weeks ago. In the United States, companies can launch road shows two weeks after public filing and more often than not stick to that schedule. The recent massive sell-off in the market, combined with the correction in the IPO market since early last month, when some new issuers are debuting, may make market conditions less predictable for new entrants who are “physically” loans – which means they’ve cleared all regulatory hurdles for the IPO – to come out the door, ”said Stephanie Tang, head of private equity for Greater China at law firm Hogan Lovells. “Some participants may choose to watch the market for more stable conditions.” The delays put the brakes on a flood of Chinese and Hong Kong business listings in the United States which have already reached $ 7.1 billion since the start of the year – the fastest pace on record. – after exploding in 2020. IPO demand surged as a wave of global stimulus funds, ultra-low interest rates and rising stock markets attracted investors despite Sino tensions- and the continued risk of mainland equities withdrawing from the US stock markets. The S&P 500 Index capped its biggest two-week drop since February on Friday, as investors increasingly fear inflation and its impact on tech and growth stocks. China’s CSI 300 index remains in a technical correction, after falling 10% from its February high, while the Nasdaq Golden Dragon China index, which tracks Chinese companies listed in the United States, fell by more than 30% from its peak this month. , which offers a bike-sharing platform and electric scooters for sale, has delayed its planned launch and remains undecided on its potential valuation given growing investors’ caution over new stocks, Bloomberg News reported. He had planned to raise between $ 500 million and $ 1 billion in the offer, although the final figure will depend on valuations, according to a person with knowledge of the matter. their announcements were put on hold after starting to gauge investor interest at the end of April, people with knowledge of the matter said, asking not to be identified as the information is not public. comes after the filing of an IPO and before the formal order taking at a roadshow. Hello declined to comment while Qiniu did not immediately respond to an email request for comment. Ximalaya’s IPO process is ongoing and the company will seek to be publicly traded at the appropriate time depending on market conditions, he said in response to questions. Weak beginnings The poor performance of recent Chinese debutants also undermined investor confidence. Insurance tech firm Waterdrop has plunged 38% from its offering price since going public earlier this month. Onion Global Ltd., a lifestyle brand platform, fell more than 8% below its IPO price. Bloomberg shows, among them, the two largest IPOs – electronic cigarette maker RLX Technology Inc. and online question-and-answer site Zhihu Inc. Of those that were listed in 2020, only 40% are trading in below their IPO prices. has scared American companies as well. They have also delayed floats or faced weak beginnings. For some, the current challenges facing Chinese listing candidates are likely to be transient, with the much-anticipated IPO of giant Didi Chuxing Inc., which has filed a confidential multibillion-dollar bid, intended to prove the real test of investor appetite for Chinese history.Apart from Hello and the two other companies reportedly delaying IPO plans after the launch of their pre-commercialization process, the Chinese road freight platform ForU Worldwide Inc., which submitted an offer in the United States on May 13, and the online education company Zhangmen Education Inc., who filed on May 19, are waiting behind the scenes although they have not yet passed the two-week deadline. strong growth in China in which international investors will always want to invest for the longer term, ”said Gary Dugan, Managing Director of the Global CIO Office in Singapore. -last paragraph.) More stories like this are available at bloomberg.com Subscribe now to stay ahead with the most trusted source of business news.