April 23, 2024

IPO News

Nasdaq IPO: Chinese Tech Group Sees Revival in Offshore Listings

Executives at the New York Stock Exchange are hopeful that the listing of a Shanghai-based producer of automotive sensors on the Nasdaq exchange will help defuse tensions that have prevented Chinese companies from going public in the United States for over two years.

On Wednesday, Hesai Technology, a provider of laser-based sensors to automakers and autonomous driving firms, earned $190mn from investors in an IPO, valuing the company at around $2.4bn.

Early Thursday trading saw a 21.0% gain from the listing price of $19 per share, with the stock reaching $23 per share, generating some positive IPO news for Nasdaq and signaling a potential delisting of Chinese companies from the exchange could be avoided.

After a string of good events in recent months “removed the black clouds that lingered over the US stock markets for Chinese firms,” Nasdaq’s Asia-Pacific head Bob McCooey expressed optimism that the acquisition would be a “seminal” event that would help restore investor confidence in Chinese firms and drive their share prices higher.

The US-China Review Commission, a panel established by Congress to investigate the implications for national security of trade and business connections between the two nations, and over 200 Chinese firms valued a total $1tn are traded on US markets.

While political concerns, regulatory issues, and the catastrophic $4.4bn IPO of ride-hailing giant Didi Chuxing placed an abrupt halt to the wave in 2021, China remained the leading source of international listings in the US and a rich wellspring of revenue for US exchanges.

Less than a year after its NYSE debut, Didi was delisted due to a series of regulatory inquiries in China that resulted in billions in losses for investors.

Hundreds of Chinese firms faced the prospect of being forcefully delisted due to a dispute between Washington and Beijing over the examination of Chinese companies’ audits, but a resolution was achieved in December.

According to Dealogic statistics, Hesai is the biggest Chinese technology organization to float in New York after Didi and the first Chinese business to fundraise over $100mn in the US.

Dealogic reports that Goldman Sachs, Morgan Stanley, and Credit Suisse are all insuring their first transaction with a Chinese company since 2021, thus this listing also signals the return of several of the major western banks to US-China agreements.

McCooey said that the IPO’s prospects were bright since it had representation from three of Asia’s largest companies.

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