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My Favorite China's Brands
Economy

Scale of Chinese IPOs in U.S. market grows nearly 5 times this year

October 09, 2018


Abstract : Scale of Chinese IPOs in U.S. market grows 490.6 percent year on year in the first three quarters, with 7.3 billion U.S. dollars raised.

IPO

BEIJING, Oct. 9 (Xinhua) -- The funds raised by Chinese companies in the U.S. capital market through initial public offering (IPO) increased 490.6 percent year on year in the first three quarters of this year, showing that Wall Street has increasing interests in Chinese start-ups.

As of August 25, China's IPOs raised 7.3 billion U.S. dollars, the largest amount since 2014 (28.7 billion U.S. dollars), far exceeding U.S. companies, as shown in the statistics by Thomson Reuters.

In a breakdown, China's IPOs on Nasdaq Stock Market raised a total of 4.9 billion U.S. dollars, and those on the New York Stock Exchange raised 2.4 billion U.S. dollars.

In the first three quarters, 23 Chinese companies conducted IPO in the U.S., the largest number in the past eight years, according to a study by institutional research firm Renaissance Capital.

These companies mainly focus on areas such as education and training, retail, Internet finance, video services and manufacturing. In general, Internet and technology companies take up the largest share.

Among the 23 companies listed, video service provider iQiyi (IQ.NASDAQ) set the record for the largest China's IPO in the U.S. this year, raising funds of 2.4 billion U.S. dollars, followed by the Groupon of China, Pinduoduo (PDD.NASDAQ), with an IPO scale of 1.6 billion U.S. dollars. The electric-car maker Nio Inc. (NIO.NYSE) ranked at the third with 1 billion U.S. dollars raised.

Thomson Reuters' statistics also show that IPOs by Chinese companies accounted for 35.5 percent of the global market in the same period, raising a total of 51 billion U.S. dollars, and five of the world's largest 10 IPO transactions came from Chinese issuers. U.S. companies followed closely, occupying 20.4 percent of the market, raising a total of 29.3 billion U.S. dollars, up 24.9 percent year on year.

Bob McCooey, senior vice president of Nasdaq's Listing Services Unit, said he is optimistic about the prospects of China's IPO. He believes that the prices of Chinese companies listed in the U.S. will recover strongly after a period of weakness and may double this year.

McCooey said that an important reason of the stock price rebound is young Chinese entrepreneurs' deep understanding of the value of the U.S. stock market.

According to the study by Renaissance Capital, IPOs of Chinese companies will take the lead in the U.S. market, in the fourth quarter, even if U.S companies are expected to accelerate the pace. (Edited by Li Wenxin, Yang Qi, liwenxin@xinhua.org)

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Keyword: U.S. China-IPO fund-raising

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