The political sparring between Washington and Beijing has not dampened Chinese companies' interest in listing stocks in the US
Source: Renaissance Capital. Excluded are SPACs, best-effort IPOs, deals that contribute less than $ 5 million, or have a market capitalization of less than $ 50 million.
"We also believe that we can show our true value as a US-listed company highly-qualified [Chinese] education companies are listed in the US," said Li. Sunlands dropped by nearly 13.3 percent on Thursday has a market capitalization of about $ 1.5 billion.
Eight Chinese companies raised $ 3.3 billion in the first quarter, mainly due to an increase in video streaming company iQIYI, said Renaissance $ 2.3 billion.
More can come. Drew Bernstein, co-head of China practice at Marcum Bernstein & Pinchuk, an auditor for Chinese IPOs in the US, said he is currently working on about six or seven offers and has accepted at least four more customers.
"Many Chinese want to emigrate to the US [and having corporate name recognition] facilitates their access to immigration," said Bernstein.
President Donald Trump has targeted China with tariff plans and a reinforced examination of Chinese degrees in the US. The value of completed foreign direct investment transactions in the US has fallen by more than a third since 2016 and the value of newly announced deals has fallen by more than 90 percent, according to the Rhodium Group.
Meanwhile, Beijing sought to curb capital flight and was reportedly encouraged to encourage major Chinese companies to write down a "Chinese Depositary Receipt" or "CDR" system in mainland China.
"Based on news and announcements hitherto made by Chinese government authorities, we believe that CDR emissions are likely to be released in 2H18," Morgan Stanley Equity Strategists said in a March 19 report ,
Sunlands & # 39; Li said he does not believe that the political tensions between the White House and Beijing will affect his business, and the company has no plans to hold a secondary bid in mainland China. For many Chinese companies wishing to go public in the US, their stated international ambitions coincide with a national urge for Chinese companies to go overseas.
"At the moment, the US market is still considered a better place to price for tech reviews, so we still expect Chinese listings here," said Kathleen Smith, a director of Renaissance Capital, a provider of IPOs ETFs and institutional research in an email.
"In the long run as Asian markets develop, it makes sense that Chinese companies be listed in their local markets," said Smith.
Despite the onslaught on the list In the US, the latest Chinese offerings were not that good yet. For example:
- Sunlands lost nearly 25 percent a week.
- animation-focused video streaming site Bilibili (ticker: BILI) opened Wednesday at $ 1.70 below its IPO price and the 3-billion share closed 2.1 percent lower for the day Thursday.
- The much larger iQIYI (Ticker: IQ) lost 13.6 percent on the first Thursday. The offering places Goldman Sachs among the underwriters and is the largest IPO of a Chinese company in the US since 2014, when e-commerce and tech giant Alibaba went public, Renaissance said.
As with any security, investors must do their own research.
The documentary "The China Hustle," released on cinemas on Friday, warns investors when a string of Chinese IPOs hit the US market about a decade ago. Pension funds and pension funds lost at least $ 14 billion in Chinese equities that turned out to be a scam. The film claims that Chinese financial markets are now even more closely linked to the global system and calls for more regulation.
"I do not think anything else has changed except that the scam has become more complicated and sophisticated," said Dan David, co-founder of the Geo-Investing Hedge Fund, which is featured in the documentary. "I do not think all China-based IPOs are involved in fraudulent activity, but they could all be and they will not break the law in China."