China listing frenzy in U.S. set to be boosted by Didi IPO

Ride-hailing giant Didi Chuxing’s planned $4 billion New York debut will supercharge Chinese listings in the United States on the back of an all-time high in the first half the year, despite political sparring between the two countries.

A total of 29 initial public offerings (IPOs) by Chinese companies in the United States in the first six months of the year raised $7.6 billion, the highest amount ever for that time period, according to Refinitiv data. That was significantly higher than the $1.9 billion worth of listings in the same time period last year when Chinese firms were more cautious about uncertainties over the economic fallout from the coronavirus pandemic.

The rush of listings happened despite continued political tension between the two countries under President Joe Biden, and the looming threat of U.S. kicking out Chinese companies if they fail to meet auditing standards. “The Chinese equity story is still appealing to international investors, whereas the U.S. valuation and international fund raising opportunities are just as appealing to the Chinese issuers,” said Ivy Wong, chair of law firm Baker McKenzie’s Asia Pacific capital markets practice.

“Having contemplated the audit requirements coming into play for quite some time, it doesn’t seem that the investors’ appetite has changed nor the issuers’ appetite to list and raise funds from U.S. listings has changed.