Article / Lianzi editor / Vicky Xiao
Source / guixingren123
The upsurge of listing in the United States never stops
Chinese companies still face some audit risks. The US Securities and Exchange Commission said last month that it would start to implement mandatory financial audit on overseas companies, but this risk did not prevent Chinese companies from accelerating the NASDAQ listing operation in the next few months. Stephanie Tang, head of Greater China private equity at Hogan Lovells, a law firm, told Reuters that Nasdaq will welcome more Chinese companies to list in 2021, which is likely to include didi travel.
According to a number of media reports, Didi travel has secretly submitted its IPO application. If it goes public, the Chinese company is expected to be valued at $100 billion. The previous record for Chinese companies was in 2014, when Alibaba went public in the United States and raised $25 billion.
It is worth noting that in the past two years, many companies have chosen to be listed on the US stock exchange and then listed on the Hong Kong stock exchange for a second time, so as to hedge against the possible risk of NASDAQ delisting. Didi travel, which is about to be listed overseas, is likely to choose the dual listing mode of US stock and Hong Kong stock.
Unsustainable high IPO price
Yang Xu, chief representative of NYSE China, told CNBC that about 60 Chinese companies will plan to list in the United States in 2021. But at the same time, he is also worried about whether such a high IPO valuation is reasonable.
When the US stock market in 2021 experienced the shock brought by the 2020 epidemic, there was another sign of soaring inflation. Many people in Wall Street began to question that the 2000 technology bubble had struck again.
According to data released by Ernst & young, the first quarter of this year is the busiest quarter of IPO in the United States in 2020. About 50% of the 36 companies listed in the first quarter of the United States came from Greater China.
'these Chinese companies don't want to waste any time in the listing process, 'Mr. Yang said in an interview. In 2020, it will take an average of 73.26 days for 34 Chinese companies to land in the US stock market from the initial submission of prospectuses to the successful listing. Xiaopeng, shell and ideal all completed their IPO in only 20 days.
According to Renaissance Capital, 30 Chinese companies listed in the US last year, raising the most money since 2014. This once-in-a-lifetime stock market opportunity makes more and more Chinese start-ups seek the best time to cash out. More and more evidence shows that the panic of Chinese enterprises about going public in the United States during Trump's administration has been eased after Biden took office this year.
The direct result of this sign of overvaluation is that the share price shrinks after IPO.
In February, the sharp rise of Hong Kong stock market jumped to 415 Hong Kong dollar in the early stage of the listing, but Kwai clipper fell sharply. As of press release, Kwai Kong is valued at HK $259.
Choo Choi, head of Asia Pacific IPO at Ernst & young, told CNBC: this year's post IPO trend is not as good as last year's, and that the macro economy may deteriorate in the third quarter.
In addition to this concern about whether the overall environment can continue to support the overvaluation, some Chinese companies' share price declines after overseas IPOs are also linked to their own profitability.
For example, RLX Technology Inc., which has the highest valuation this year, went public at $30 a share in January, but its share price has dropped to about $10 a share as of press release, evaporating about two-thirds of its market value.
The company, which has only been established for three years, is now one of the leading companies in China's e-cigarette market. However, with the tightening of domestic policies in the field of e-cigarettes and the announcement of protecting minors from e-cigarettes, the company has to completely end the sales of e-commerce channels and turn to offline market development, which also greatly increases the operating costs.
Although in the early days, many insiders speculated that Wuxin technology chose Nasdaq for listing in the hope of expanding its market share overseas, until now, the company has not been able to obtain TMPA permission (tobacco pre listing application) in the United States.
The graffiti intelligence mentioned above is no better. Its stock price was about $25 in March, and then fluctuated a lot. Today, it closed at about $19 A share. The company's net losses in 2019 and 2020 add up to about $140 million.
This year, in addition to didi travel, Nasdaq may also usher in love recycling, homework help, pinecone travel, daily fresh, hello travel and so on.