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Chinese IPOs raised $12.5 bln in 1H 2021, more than all 2020

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This could be a record year for Chinese companies aiming at US capital markets. After a fantastic 2020 and the highest amount of funds raised since 2014, Chinese IPOs had a strong start in the half of this year.

According to data presented by BuyShares.co.uk, Chinese companies raised a record $12.5 bln in 34 initial public offerings in US capital markets, more than in the entire 2020.

The US capital markets have been a lucrative source of funding for Chinese companies in recent years, especially for tech firms looking to benchmark their valuations against listed peers. Many of them kept their enthusiasm for US markets in 2020, despite turbulent relations between the world’s two largest economies.

The Renaissance Capital data showed that last year, China-based companies raised $11.7 bln through a total of 30 IPOs in the United States, the highest amount of capital since 2014 when Alibaba went public as the biggest IPO to date.

However, 2021 set a new record, despite the tensions between the two countries and Washington’s threat to delist companies that do not comply with US accounting rules.

Statistics indicate that between January and June, there were a total of 34 Chinese IPOs in the US capital markets, 20 more than in the year-ago period. Also, the total value of funds raised hit a record $12.5 bln, a massive 557% increase year-over-year.

 

DiDi’s $4.4 bln Listing Largest Chinese IPO since 2014

In 2014, Alibaba Group raised $21.8 bln on the first day of trading and remained the largest IPO in the United States ever. Statistics show that since then, five out of the ten largest IPOs by Chinese companies on the US stock exchanges occurred in the last year.

Lufax, KE Holdings (Beike) and Xpeng were listed in August 2020, while Full Truck Alliance and Didi Global made their debuts in the US amid the volatile IPO environment in June 2021.

Both IPOs happened at a time when the United States has been tightening regulations for the listing of Chinese companies on the US stock exchanges, and Chinese regulators intensified the antitrust campaign.

Despite that, Didi raised $4.4 bln which pushed its valuation up to $68 bln, marking the second-largest US listing by a Chinese company in the past seven years.