After a two-month lull, China companies are returning to the U.S. to raise new capital through initial public offerings - in spite of tensions between the U.S. and China.
This week, Tencent Holdings Ltd. and SoftBank Group Corp.-backed cargo company Full Truck Alliance Co., a startup that provides an Uber-like service for road-haulage and is also known as Manbang Group, is set to list its shares in New York. The company will announce final pricing for its expected $1.57 billion initial public offering before the market opens Monday EDT. The stock will begin trading Tuesday.
Last week, JD.com, Inc.-backed internet company AiHuiShou International floated its shares in New York. The company's stock closed 22.9% higher on debut. AiHuiShou International raised more than $227 million.
A week earlier, online recruitment company Kanzhun raised more than $912 million in an initial public offering. The company's stock price nearly doubled on its Nasdaq composite debut.
One of the most anticipated China IPOs in the U.S. this year is Didi Chuxing Technology Corp.'s planned $10 billion initial public offering in New York. Sources familiar with the matter said the company was now holding preliminary investor meetings.
So far, about 20 more China companies have announced plans to list in the U.S. The companies are expected to raise a combined $6 billion.
"The momentum is back. Investors are warming up to China technology players once again. A few strong debuts can propel the volumes higher. (Kanzhun) vindicated our belief that the slump was temporary and investors remain eager to lay their hands on fast-growing companies from China," sources involved in one of the transactions said.
Tensions between the U.S. and China continue. Despite this, China technology companies are still electing to list in the U.S. because of the liquidity in the world's largest capital market.
U.S. exchanges continue to be the home of the world's largest technology companies. Analysts said China companies were willing to take the risk of being singled out for the opportunity to tap into a broader investor base.
"The benefits of a U.S. listing still far outweigh the risks from a forced delisting, if it were to eventuate at all. It gives exposure to a wide investor base and also sets the tone for a globally accepted valuation, which can be used as a benchmark for listing elsewhere," a source involved in Full Truck Alliance's initial public offering said.
