Chinese IPOs are coming back to the US

FE Team | Published: February 10, 2023 22:21:35

BEIJING, Feb 10 (CNBC): Chinese startups are raising millions of dollars in US stock market listings again, after a dry spell in the once-hot market.
Hesai Group, which sells "lidar" tech for self-driving cars, listed on the Nasdaq on Thursday. Shares soared nearly 11 per cent in the debut.
The company raised $190 million in its initial public offering, more than initial plans -- and one of the largest listings since ride-hailing giant Didi raised $4.4 billion in its June 2021 IPO. That listing ran afoul of Chinese regulators, who ordered a cybersecurity review into Didi just days after its public listing. The company delisted later that year.
As of the end of 2022, only six China-based companies had issued American depositary receipts in US IPOs since the Didi fallout, according to Wind Information. One of those companies was biotech company LianBio, which raised $334.5 million in Nov. 2021 -- the largest to date since Didi's listing, the data showed.
But the dry spell in Chinese IPOs in the US is starting to end as firms get more regulatory clarity.
One new rule Chinese authorities announced requires internet platform operators with personal information of more than one million users to apply for a cybersecurity review before they can list overseas.
On the US side, the Public Company Accounting Oversight Board (PCAOB) reached an agreement last year with China's securities regulator and finance ministry to inspect the audit work papers of Chinese companies listed in the US.
The PCAOB said in mid-December it secured "complete access," removing a near-term risk of forcing Chinese companies to delist from US stock exchanges.
After the announcement, online adult education company QuantaSing became the first China-based company to list in the US, Wind data showed.
Major investment banks Citigroup, CICC and CLSA were among the underwriters for the IPO, which raised $40.6 million. QuantaSing's backers included Prospect Avenue Capital and Qiming Venture Partners.