Chinese companies are testing the water for U.S. IPOs
Several companies are vying to be the first China-based company to go public in the United States since July, writes the Financial Times.
This will test the willingness of regulators to accept registrations in the wake of the two countries’ crackdown since then.
The report said six groups based in China and Hong Kong have filed documents with the US SEC for a Nasdaq IPO in January.
Additionally, last week, Meihua International Medical Technologies, which manufactures disposable medical devices, updated its filing.
Any deals are likely to be small, but will be watched closely by analysts and lawyers for signs that there is still a way forward for quotes from China.
“They’re definitely not Alibaba, but nonetheless… the optics would send a broader message,” said Arthur Dong, a professor at Georgetown University’s McDonough School of Business and a specialist in China-US trade relations, according to FT. . “If these are adopted, it would show that there are still visible signs of life and that this is not a completely dead market for Chinese companies to list.”
In other news related to Chinese IPOs, an investigation of more than 60 of them across the country, including the Chinese securities firm of Deutsche Bank AG, left them on hold.
Regulators scrutinize law firms and the underwriters behind them.
Read more: China investigation delays more than 60 IPOs
Twelve of them come from the STAR Market in Shanghai, the country’s technology hub, and 48 from the ChiNext startup cluster in Shenzhen.
The 60 companies hired one or more of the three firms under investigation: Zhong De Securities Co. (a joint venture between Shanxi Securities and Deutsch Bank), accounting firm SineWing, and law firm King&Wood Mallesons , according to the report. All of these companies had advised Leshi Internet Information and Technology, which was charged in March with accounting fraud.
China has said its policy is “zero tolerance” when it comes to securities and accounting fraud.