The global IPO market in 2023 has been a mixed bag, with both gleeful highlights and unexpected turns. After experiencing the "darkest moment" in the second half of 2021 and the turbulent trough in 2022, the popularity of IPOs of Chinese concept stock companies in the United States has rebounded significantly in 2023, and the number and scale of Chinese concept stock IPOs have increased significantly compared with the same period last year. In order to better assist enterprises in planning the next capital operation, Huayixin will take you to review the listing of Chinese concept stocks in the United States in 2023 and look forward to the development prospects in 2024.
In 2023, the number of IPOs and the amount of funds raised by Chinese concept stock companies in the United States have increased significantly compared with last year.
In terms of the number of listings, in 2023, the U.S. market will usher in a total of 36 Chinese concept stocks, and another 11 Chinese concept companies will choose to pass SPACway in U.S. stocksListed. The number of IPOs will be significantly higher in 2023**, and the number of SPACs will be almost flat.
In terms of the scale of fundraising, the total amount of initial funds raised by 36 Chinese concept stock companies listed in the United States IPO in 2023Super$900 million. Among them, the top three IPO fundraising quotas are Hesai, Structure Biotech, and Zhenkun Bank, the "first stock of China's MRO" that just landed on the New York Stock Exchange last month, raising 1900 million, 1$6.1 billion and $62 million. The number and scale of financing increased year-on-year, respectively. 51%, the growth in the number and scale of financing shows that Chinese concept stocks are rebounding against the trend.
Notable two companies, the first is Hesai Technology, a Chinese developer of sensor technology for autonomous vehicles, which went public on Nasdaq on February 9, 2023. This is the largest IPO raised by a Chinese company in the United States since Didi's delisting in 2021, raising a total of 1At 900 million US dollars, it was also the largest fundraising among Chinese concept stock companies in the U.S. market that year.
The second is Zhenkun Xing, China's leading MRO procurement service platform, which was listed on the New York Stock Exchange on December 15, 2023, becoming the first company in China's MRO industry to list in the United States**. According to the issue price, the market value of Zhenkun Bank is about 2.5 billion US dollars, and it is also the largest IPO in the United States in the past two and a half years.
On the one hand, mainland enterprises continue to be encouraged by the regulators to list overseas, and eligible enterprises are supported to list overseas. On November 27, 2023, the People's Bank of China, the State Administration of Financial Regulation, the China Securities Regulatory Commission and other departments jointly issued the Notice on Strengthening Financial Support Measures to Help the Development and Growth of the Private Economy, which specifically mentions "supporting qualified private enterprises to list overseas and make good use of two markets and two resources". Huayixin believes that this shows that the regulator's attitude towards enterprises going out for financing is clearer.
On the other hand, the filing process of domestic enterprises going overseas for listing has been greatly accelerated, and more "green light" cases have emerged, boosting market expectations. Among them, Cheche Group Inc., which is registered in the Cayman Islands, is the domestic operating entity with Beijing Cheche Technology ***Cheche Technology, which is an overseas issuer and listed entity, became the first company to adopt the VIE structure to go public in the United States after the "Notice of Filing for Overseas Issuance and Listing" issued by the China Securities Regulatory Commission.
Huayixin believes that this shows that the China Securities Regulatory Commission (CSRC) has "released" the VIE model with statements and actions, which may attract more Chinese companies to choose the VIE model. The structure of a Chinese company's listing in the U.S. is crucial and requires a professional team with a deep understanding of Chinese law and the U.S. capital market.
Looking ahead to 2024, the trend of Chinese concept companies going public in the United States will continue to grow. First of all, according to the disclosure on the official website of the China Securities Regulatory Commission, as of December 28, 2023, 27 domestic enterprises have submitted filing applications for overseas issuance** and listing filings (as shown in the figure below).
As can be seen from the above figure for the filing of companies planning to go public in the United States, in the context of the increasingly perfect supervision of overseas listing filings in China and the accelerating pace of approval, more companies are considering or preparing to list in the U.S. market, and the listing team of Chinese enterprises in the United States is still expanding, and the IPO of the U.S. market may further recover in 2024.
Second, the global IPO recovery is based on an improving macro backdrop, and companies are eagerly awaiting better market conditions to widen the IPO window. Against the backdrop of geopolitical détente, IPO activity is expected to accelerate.
It is expected that the listing of Chinese companies in the United States will show a stronger growth trend in 2024, driven by factors such as the nearing end of the US dollar interest rate hike cycle, the continuous improvement of the Sino-US audit and regulatory cooperation mechanism, and the gradual maturity of the overseas listing filing system.
Enterprises should plan a suitable capital market path as soon as possible according to their own development plans and industry attributes. According to Huayixin's years of experience in overseas listing, whether it chooses to be listed in China or abroad, enterprises need to go through a long standardization process.
On the one hand, the overall period of listing in the United States is usually about 8 to 12 months. If a company plans to go public in the U.S. in mid-2025, it should start hiring intermediaries in the first quarter of 2024 to adjust the shareholding structure and sort out the company's financial and business complianceFinancial, business and legal due diligence and other preliminary preparations.
On the other hand, companies need to reserve sufficient time on the listing schedule to complete the relevant pre-review and filing procedures to meet the requirements and procedures of the regulators.