- There is a strong appetite among Chinese companies to list on American stock exchanges, according to Kobe Ji, head of China at the New York Stock Exchange.
- Despite the negative impact of Covid-19 and the resulting lockdowns, “we are still seeing a very strong and growing awareness and motivation for Chinese companies, who want to list their companies” on the New York Stock Exchange, he said at CNBC’s East Tech West conference in the Nansha district of Nansha. . Guangzhou, China, on Tuesday.
Traders work during the IPO of Chinese ride-hailing company Didi Global Inc on the floor of the New York Stock Exchange (NYSE) in New York City, US, on June 30, 2021.
Brendan McDiarmid | Reuters
There is a strong appetite among Chinese companies to list on US stock exchanges, but such initial public offerings are becoming a more complex process, according to Kobe Ji, head of China at the New York Stock Exchange.
Despite the negative impact last year caused by COVID-19 restrictions and regulatory uncertainty in the US, many of these issues have now been resolved and “we continue to see very strong interest from Chinese companies to list in the US,” he told the East Asia conference. Tech West held by CNBC in the United States. Nansha district of Guangzhou, China, on Tuesday.
He added that they are not familiar with the procedures, which have proven more difficult in recent times. That’s according to a CNBC translation of his Mandarin remarks.
“Previously, listing in the United States was relatively easy,” Ge said, noting that it would only take four and a half or five months for Chinese companies to complete an IPO in the United States.
“In light of some new measures, the company may need to spend more time, a 12-month preparation period,” he said, referring to new rules from the China Securities Regulatory Commission.
The new measures, which have been in effect since March 31, outline an application process for local companies wishing to list in the United States or Hong Kong, and require them to comply with national security measures and the Personal Data Protection Law before going public abroad.
Amid the tepid U.S. IPO market, the group of Chinese names that managed to list this year were mostly small companies.
Ge said that increasing political tensions between Washington and Beijing have also led to uncertainty among Chinese companies and investors.
US President Joe Biden signed Executive order In August, the goal was to streamline new American investments and expertise that support China’s development of sensitive technology. The new measures, which are expected to be implemented next year, target investment in semiconductors, microelectronics, quantum computing and some artificial intelligence capabilities.
“Of course, the details have not been announced yet, everyone is probably watching and waiting, so this may prompt investors to wait and see regarding these changes,” Ge said.
However, GE remained optimistic that Chinese listings in overseas markets will rebound as long as local companies focus on building strong businesses.
He likened the situation to a ship at sea. “Of course, everyone should pay attention to the weather, and at the same time they should pay more attention to whether the ship has been built well,” he said.
Today, he added, this means investors are looking more for mature business models and predictable profits, rather than just high growth. “So you need to build a very good ship.”
The US IPO market is also expected to improve in the April-October period next year, Ge said.
Robert McCoy Jr., Vice Chairman of Nasdaq, shared a similar view that there is a strong pipeline of Chinese companies intending to list on the exchange soon.
“I think there are 116 right now that are registered or that we know will be introduced soon,” he said in a separate session at CNBC’s East Tech West event.
“And the most interesting aspect is now with the new process that the Securities and Exchange Regulatory Commission is doing… everyone in China, everyone around the world can see the companies that are participating in this process, because of the way the regulations have gone through.” He added, referring to the China Securities Regulatory Commission.
This is a notable increase from 65 Chinese companies, McCoy highlighted in a previous interview with CNBC in June.
As of January 2023, there is 252 Chinese companies forOn US stock exchanges – including the New York Stock Exchange, Nasdaq and the US Stock Exchange – with a total market value of $1.03 trillion, according to official data.
“We are pleased that we have a number of listings that have gone through the SEC process… There are three or four companies that should be approved in the near future,” he added. “I think this gives confidence to companies interested in listing outside China.”
