Despite the fundraising frenzy, China’s listing in the US ended in failure


Although the amount of financing hit a record high, investor sentiment has been hit due to increasingly strict regulatory review. This year, more than two-thirds of Chinese companies listed in the United States have their share prices below the initial public offering price.

According to data from research provider Dealogic, after 34 Chinese companies raised $12.4 billion in New York listings in the first half of 2021, their share prices did not perform well, and both data set record highs. In comparison, 18 listed companies raised US$2.8 billion in the same period last year.

The surge in the first half of the year hit a record high A windfall on Wall StreetAccording to Dealogic, investment banks including Goldman Sachs and Morgan Stanley incurred nearly $460 million in expenses.

But about 70% of these Chinese companies are trading at prices lower than their IPO prices, partly because of increasing regulatory resistance from Beijing and Washington.

These include RLX Technology, China’s largest e-cigarette manufacturer, which raised US$1.4 billion In JanuaryAfter the country issued a draft regulation categorizing e-cigarettes as tobacco products in March, its stock price fell 71%.

Didi Chuxing becomes an online car-hailing group The largest listed Chinese company After raising $4.4 billion in New York last week, it has also been hit by regulatory scrutiny in the United States this year.

Its shares Fell sharply On Friday, after the Chinese cybersecurity regulator announced that Didi was under investigation. However, Didi’s stock price is still higher than its IPO price.

The company is the largest Chinese listed company in the United States since Jack Ma’s e-commerce group Alibaba raised US$25 billion in 2014, although Didi lowered its initial funding target from the proposed US$7 billion.

“There are regulatory concerns about specific industries, and there are general regulatory concerns, so to complete a multi-billion-dollar transaction now, you need to attract global investors who are only long-positioned at a low price,” A Hong Kong fund manager said. Invest in Chinese transactions in the United States.

The All Truck Alliance, which provides Uber-like services to the Chinese trucking industry, raised $1.6 billion on the New York Stock Exchange last month, but its stock price also fell below the IPO price.

Smaller Chinese deals also underperformed. Miss FreshThe share price of the Chinese grocery delivery application backed by the Internet group Tencent after its listing in June was 34% lower than the issue price. Dingdong, backed by SoftBank, cut its IPO target by more than 70% before going public. Its stock price closed flat on the first day of trading, but has since risen about 20%.

Raj Ganguly, partner of B Capital Group, a venture capital firm that invests in the United States and China, said: “For many investors… they are more willing to invest in US technology companies, or only the top and largest Chinese technology companies.”

Stock index performance returns to 100 points. The line chart shows that China's stock market is excluded from the global technology rebound.

Chinese companies are Face a blow From Beijing and Washington.

The former is aimed at technology monopolies, including A record fine of US$2.8 billion was imposed on Alibaba, Has impacted Chinese stocks listed in the United States. The Nasdaq Golden Dragon China Index, which tracks Chinese technology stocks listed in New York, fell 8%, while the US-focused Nasdaq Composite Index rose 13%.

In the U.S., Chinese companies Risk of being delisted If they do not comply with audit disclosure requirements.Although the increase in censorship has resulted in Series secondary listing For such groups in Hong Kong, it has not affected the enthusiasm for listing in the United States.

“A record high [in fundraising] Compared with American investors, the appetite of Chinese issuers has more to do with it,” said the chief service officer of a European bank in Hong Kong.

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