SHANGHAI/HONG KONG- At least six Chinese companies have lodged documents for New York listings in recent weeks, filings showed, promising an end to a months-long freeze after an unprecedented clampdown last year by Chinese regulators.
However, the plans are for initial public offerings (IPOs) of small size, ranging from $1 million to $35 million, and are unlikely to trigger a slew of sizeable debuts soon, as companies await more clarity on new offshore listing rules, bankers said.
Chinese firms raised $12.8 billion in the United States in the first seven months of last year, but the deals halted after the New York debut of Didi Global in late June triggered a regulatory backlash by Beijing.
That brought tighter scrutiny for all offshore listings.
Some smaller Chinese companies are now reviving efforts to sell shares in the United States, confident they are not targeted by the new rules seeking to block offshore listings by firms handling large amounts of data or posing national security risks.
“I think both US and Chinese regulators hope legitimate, law-abiding companies like us can grow bigger and stronger through listings,” Zhang Jiulin, chairman of insurance broker Hengguang Holding Co, told Reuters.
His company filed a draft IPO prospectus on Jan 18 with the Securities Exchange Commission (SEC), aiming to raise up to $19.6 million via its Nasdaq listing later this year.
Zhang brushed aside concerns that tighter Chinese control of cross-border data transfer will hamper the firm’s US listing, saying Hengguang did not collect sensitive individual customer data.
New rules by the Cyberspace Administration of China (CAC) take effect on Tuesday, requiring a security review of all platform companies with data on more than 1 million users before they list overseas.
