Chinese firms pull back from listing in the U.S. as Hong Kong IPOs see a surge
Chinese companies have pulled back from listing in the U.S. this year in a clear pivot to Hong Kong amid rising tensions between Beijing and Washington, and higher regulatory thresholds in New York. Chinese initial public offerings in the U.S. have slumped 4% year-on-year in terms of deal value so far this year, raising just $875.7 million from 23 deals. That’s down 93% from the $13 billion across 39 listings during the same period in 2021, according to data provider Dealogic. In 2021, Chinese IPOs in the U.S. were on track hit a record high, before Beijing moved to intensify supervision of domestic firms after ride-hailing operator Didi Global pressed ahead with plans to go public in New York despite China’s objections. Less than six months after it went public, Didi started its delisting process . Meanwhile, Chinese IPOs in Hong Kong this year have surged 164% year on year, raising $18.4 billion from 56 listings, Dealogic data showed. “Chinese listings in the U.S. have pretty much become non-existence since Didi Global’s ill-fated IPO in the U.S.,” said Perris Lee, head of equity capital market for APAC at Mergermarket, attributing the pullback largely to Beijing’s sharper regulatory oversight. “It will be increasingly challenging to receive greenlight [from Beijing to list in the U.S.] especially for companies that fall under China’s government orchestrated strategic industries,” Lee said, prompting Chinese firms to continue seeking listings in Hong Kong. The Asian financial hub, on track to become the world’s largest listing destination this year, has seen a surge in IPOs, boosted by a string of billion-dollar deals, including Contemporary Amperex Technology’s $5.3 billion IPO and Zijin Gold’s $3.2 billion listing. Interest in Hong Kong is fueled by a confluence of factors, including better fundraising condition following Beijing’s supportive measures introduced in September last year, boom in technology and artificial intelligence sectors, fueled by the unexpected rise of Chinese startup DeepSeek, said Eugene Hsiao, head of China equity strategy at Macquarie. Hong Kong regulators also unveiled a so-called “Technology Enterprises Channel” in May to facilitate IPO approvals for specialist technology and biotech companies, particularly those already listed in the mainland. PwC projects Hong Kong to see up to 100 IPOs this year, with total fundraising to exceed $25.5 billion. Expectations are high that momentum will carry into the final quarter this year, according to Peihao Huang, head of equity capital markets for Asia Pacific at J.P. Morgan. “We expect a very busy Q4 and first-half 2026 with a super strong pipeline,” Peihao said, as Chinese companies listed in the mainland accelerate their process for a Hong Kong dual listing, as well as new IPOs in the city. Investors have also grown more upbeat about opportunities in Greater China, encouraged by the conviction of China’s strengths in selective technologies, biotech and advanced manufacturing sectors, attractive valuations in Chinese equities and a cautious repositioning by global funds that have for years been “structurally underweight” on China, Peihao said. Hong Kong’s Hang Seng Index has advanced 27% so far this year, despite the recent retreat following the renewed U.S.-China tensions. Beijing controls One major snarl for Chinese companies interested in U.S. listings is Beijing’s tight control of the IPO process. Chinese government has been keeping a firm grip on capital outflows, including stock offerings overseas. Asserting its power over private businesses, Beijing in 2020 halted Ant Group’s planned Hong Kong and Shanghai listings less than 48 hours before what would’ve been the world’s biggest IPO. “Shein’s failed attempt to get listed in the U.S. has only further underscored Beijing’s regulatory preferences on where its companies should get listed — either at home [onshore exchanges] or Hong Kong,” Lee added. Shein, an online fast-fashion retailer with Chinese roots, was looking to list in New York but ultimately shelved the plan, reportedly shifting its focus to a Hong Kong listing after its proposed London IPO failed to secure approval from Beijing. More than 280 Chinese companies are listed on major U.S. stock exchanges including Nasdaq and the New York Stock Exchange with a total market capitalization of $1.1 trillion, according to a March report from the U.S.-China Economic Security Review Commission . Small-cap companies have made up the vast majority of the China’s U.S. listing as blockbuster, multibillion-dollar IPOs remain absent from U.S. exchanges. The average Chinese IPO in 2024 raised just $50 million, down from over $300 million in 2021, according to the report. Seeking safer ground A growing number of U.S.-listed Chinese companies are also looking at Hong Kong amid rising delisting risks in the U.S., a trend that’s giving an extra boost to the city’s sizzling market. U.S. lawmakers called for the delisting of Chinese firms from U.S. exchanges as recently as May, citing national security concerns. In June, the U.S. Securities and Exchange Commission singled out China as it sought to raise disclosure requirements for companies listed on U.S. exchanges, Reuters reported. Lidar sensor maker Hesai Group , which has been listed on the Nasdaq since 2023, raised $535 million in its Hong Kong listing last month, becoming the latest U.S.-listed Chinese firm to pursue such a move this year. Hesai was added to a Pentagon blacklist of companies linked to China’s military last year. Hotel chain Atour Lifestyle Holdings and robotaxi firm Pony AI are also weighing listings in Hong Kong this year, with the latter obtaining the approval from Chinese securities regulator Tuesday. Temu parent PDD Holding has switched to a Hong Kong-based auditor, a move seen by some as indicating its plan to prepare for a second listing. Meanwhile, the Nasdaq has stepped up its scrutiny of small IPOs from China since last year and in September proposed a set of additional requirements that will make it harder for smaller Chinese companies to list in New York. Companies operating primarily in China will need to raise at least $25 million in IPOs to list on the exchange. “This certainly raises the bar,” said Steve Markscheid, managing partner of Aerion Capital. That could push more Chinese firms to look for SPACs or reverse take-over — where a private company merges with a public company to get listed— versus IPOs, added Markscheid, who also serves as independent director at several U.S.-listed Chinese firms. Geopolitical tensions including U.S. lawmakers’ calls to tighten restrictions on Chinese firms listed stateside have helped Hong Kong position itself as a substitute for offshore fundraising for China-based companies, said Macquarie’s Hsiao.
