Analysts say number of Chinese initial public offerings in U.S. and Hong Kong will increase next year | Wilnesh News

BEIJING – The number of Chinese initial public offerings (IPOs) in the United States and Hong Kong will increase next year, analysts say, as a number of high-profile listings outside the mainland this year boost investor optimism about profitable exits.

China Autonomous Driving Company Wen Yuanxing Listed on Nasdaq on Friday, the stock price rose nearly 6.8%. Earlier this month, Chinese robotaxi operator Pony.ai also filed documents Listed on NASDAQ. The two companies have long been working toward a listing.

Since Didi’s IPO in the summer of 2021, few major Chinese companies have listed in New York, and U.S. and Chinese regulators have stepped up scrutiny of such listings. The Chinese ride-hailing company was forced to suspend new user registrations and was delisted in less than a year.

U.S. and Chinese authorities have since clarified the procedures for Chinese companies to list in New York. However, geopolitical and market changes have significantly reduced the number of Chinese companies IPOing in the United States.

Marcia Ellis, global co-chairman based in Hong Kong, said: “After several years of slow development, we generally expect the IPO market to recover in 2025, driven by lower interest rates and (to some extent) Top) The end of the US presidential election.

“While the market views regulatory issues between the U.S. and China as problematic, many of the issues that led to this perception have been resolved,” she said.

“Chinese companies are increasingly interested in listing in Hong Kong or New York due to difficulties in listing on the Chinese mainland and pressure from shareholders to exit quickly.”

This year, there are as many as 42 companies listed on the Hong Kong Stock Exchange. There were 96 IPO applications in total As of Sept. 30, the company was either awaiting listing or was in the process of listing, according to the exchange’s website.

last week, horizon robot — a Chinese developer of artificial intelligence and automotive chips — and a state-owned bottled water company China Resources Beverage Listed in Hong Kong.

According to Renaissance Capital, which tracks global IPOs, the two IPOs are the largest IPOs on the exchange this year, excluding companies also listed on the mainland. The company noted that Chinese express delivery giant SF Express is planning an initial public offering in Hong Kong next month, while Chinese automaker Chery is planning an initial public offering next year.

George Chan, global IPO leader at Ernst & Young, said in an interview with CNBC earlier this month that the overall pace of Hong Kong IPOs this year is still slightly slower than expected.

He said the fourth quarter is generally not a good time to go public and expects most companies to wait until at least February. Chen said that in his conversations with early investors, “they are very optimistic about next year” and are preparing for the company’s initial public offering.

Companies planning to go public are typically life sciences, technology or consumer products companies, he said.

Investor confidence in Chinese stocks has improved over the past few weeks due to stimulus measures announced by high-level officials. Lower interest rates also make stocks more attractive than bonds. The Hang Seng Index has soared more than 20% so far this year after four consecutive years of declines.

Reuben Lai, Preqin’s vice president of private equity capital in Greater China, said many Chinese companies listing in Hong Kong also see it as a way to test investor interest in IPOs in other countries.

Ellis said: “Geopolitical tensions have made Hong Kong a market of choice, but the depth and breadth of U.S. capital markets still have many companies seriously considering New York, especially those focused on advanced technologies and not yet profitable, and they sometimes think their Equity stories will be more popular with U.S. investors.

Slightly more than half of IPOs on U.S. exchanges since 2023 have come from foreign companies, a 20-year high, according to Ernst & Young.

Geely-backed Chinese electric vehicle company Zekel and Chinese owned Amer Sports Both companies listed in the United States earlier this year, according to Ernst & Young’s list of major cross-border IPOs.

Chinese electric truck maker Windrose said it plans to launch the truck in the United States in the first half of 2025, with a dual launch in Europe later that year. The company aims to Deliver 10,000 trucks by 2027announced the news on Sunday Moved global headquarters to Belgium.

A resurgence in Chinese IPOs in the U.S. and Hong Kong could help funds cash in on early-stage investments in new startups. The lack of initial public offerings reduces incentives to finance new ventures.

Preqin’s Lai said investors are now looking at China again, after recently pouring money into India and the Middle East. “From now on, whether it’s capital repatriation, company valuation, exit environment (or) fund performance, I definitely see greater potential in China.”

While the pickup in investor activity is nowhere near the levels of the past two years, the nascent recovery includes some Investments in consumer goods such as milk tea and supermarkets, Lai said.