Chinese companies go public in the US for 4 months, a “vacuum” appears

After experiencing the vigorous listing boom in the first half of the year, the IPO of Chinese companies on the US market suddenly fell into a freezing point in the second half of the year. Statistics show that in the second half of the year so far, only one Chinese company has conducted an initial public offering (IPO)-Tudou.com landed on Nasdaq in August. This means that there has been a “blank” for Chinese companies listing in the US market for as long as four months.

New York Euronext Group executive vice president and co-head of US listing and cash trading Scottrade Cutler said in Beijing on December 13 that the decline in the number of Chinese IPOs in the US in 2011 was mainly caused by market volatility. He pointed out that in the past few months, in the global market, especially the US market, a large amount of money was withdrawn from the stock market and flowed into other markets.

Another personage in the industry said that due to the US-European debt crisis and the impact of the "over-the-counter stock market" turmoil, Chinese companies' IPO activities in the US market have declined significantly, but there are still a large number of Chinese companies that have the willingness to go public in the US. Volatility is slowing down and the IPO market will recover.

Global IPO suddenly caught cold

As the “debt limitation” between the two parties in the United States this summer brought a huge impact on the confidence of the financial markets, and the continued fermentation of the European debt crisis increased uncertainty, the global capital market IPO suffered a cold wave in the second half of the year. According to the Ernst & Young report, global IPO activity fell sharply in the third quarter of 2011. The number of IPOs was 284, a decrease of 26% from the previous month and a decrease of 6% year-on-year; the amount of financing was US $ 28.5 billion, a decrease of 57% from the previous month and a decrease of 46% from the previous year.

The IPO situation of Chinese companies is also poor. According to statistics, in 13 overseas markets and 3 domestic markets, a total of 82 Chinese companies were listed in the third quarter, with a year-on-year and quarter-on-month decline of around 20%, the lowest level since the 2009 domestic IPO restart and the GEM opening The amount of financing was 11.156 billion US dollars, a decrease of 32.7% and 69.9% from the previous quarter and the same period last year.

In the U.S. capital market, Chinese IPOs almost turned over in the third quarter, highlighting the market's indifference. The data shows that there were 16 overseas IPOs by Chinese companies in the third quarter, but there was only one “Tudou.com” in the US market that broke the ice and broke on the first day of listing. The stock price fell by more than 10%.

This is in sharp contrast to the hot scene of Chinese companies going public in the United States in the first half of 2011. Statistics show that in the first half of the year, there were 13 Chinese companies listed on the New York Stock Exchange and Nasdaq, with a total financing of nearly US $ 2 billion. Among them, Qihoo 360, which landed on the New York Stock Exchange in March, surged 134% on the first day of listing, becoming the third-highest IPO in the US capital market on the first day of listing in the past decade.

In the third quarter, the European debt crisis was not overshadowed. The weak US economy hit the market to a greater extent. The market is generally cautious about the future global economic trend. In addition, the prospects of Internet companies are confusing. The price-earnings ratio and the performance after listing are not optimistic, so many Chinese companies intending to list overseas have gradually slowed down.

Multiple factors trouble China stocks

Robert Grayfield, CEO of Nasdaq OMX Group, said earlier that it is not just Chinese companies that postpone listing, many other companies have also made such a choice, "This is a whole market problem."

Although poor market conditions are regarded as the most important factor affecting Chinese companies' IPOs in the United States, another reason that cannot be ignored is that Chinese stocks have repeatedly encountered “hunting and killing” in the US capital market since 2011, which has deterred many Chinese companies. .

For this, Cutler believes that although Chinese companies have suffered greater valuation pressure due to short selling, short selling is not only aimed at Chinese companies. Cutler said that Chinese companies still have many opportunities to raise capital in the US capital market. In 2010, a large number of Chinese TMT (technology, media and communications) companies were listed on the NYSE. This trend will continue in 2012.

Some insiders also said that the continuation of the trend of doing air stocks has caused the valuation of Chinese companies in the US market to be significantly lower than similar companies in other markets. Some Chinese stocks are already considering delisting in the United States and turning to the Hong Kong market in China. In this regard, Yang Ge, general manager of Asia in the NYSE's global listing business, said that where Chinese companies choose to list is related to their industry. Chinese companies in some industries have relatively low valuations in the United States. In this case, they choose to choose from It is reasonable for the US market to delist and return to Hong Kong or Shanghai for re-listing, but other industries, such as the Internet, have a much higher valuation level in the US than Hong Kong or Shanghai.

Grayfield previously said that about 30 Chinese companies have entered the NASDAQ listing channel, and the current listing channel is "as strong as before." Nielsen Grigos, president of the group's Asia-Pacific region, also expressed confidence in the 2012 market rebound. He pointed out that there are many high-growth technology companies in China. NASDAQ's plan is to combine the advantages of the two markets in 2012. Together, learn from each other.

Cutler is also optimistic about the prospects of Chinese companies going to the US for IPO in the future. He said that during his inspection in China, he found that many promising companies are preparing to go public in 2012. Although no Chinese company has been listed on the NYSE in the past six months, there is still a great chance for Chinese companies to restart the listing process.