Valuations for China’s technology firms, which were already falling before the recent onslaught, now look shakier as investors signal they will demand steeper discounts to buy shares, said one banker, asking not the named discussing internal business. In all, China’s crackdown on overseas listing threatens about 70 other private firms based in Hong Kong and China that are set to go public in New York, according to data compiled by Bloomberg. Other deals that could be in doubt include Hong Kong delivery firm Lalamove’s potential $US1 billion IPO. Podcast app Ximalaya’s US IPO is also in limbo, according to people with knowledge of the matter. “The companies are likely buying time to ensure that they’ve done enough due diligence that is required in this new Data Security Law era,” says Michael Pang, managing director at consulting firm Protiviti.Fitness app Keep has also opted not to go ahead with a planned US public filing, the Financial Times reported. The string of shelved listings may indicate that companies are putting off IPOs until they better understand Beijing’s new regulatory scheme, including the State Council’s Tuesday directive on “illegal securities activities,” which the body has yet to clarify. Soulgate cited “alternative financing options” as the reason for yanking its IPO. Bike-sharing app Hello and dating platform Soulgate both scrapped their Nasdaq listing plans in late June the companies were aiming to raise $100 million and $198 million, respectively. Ximalaya hasn’t filed to list in Hong Kong.Ĭhina’s most popular fitness app, Keep, which operates under parent group Beijing Calories Technology, was eyeing a $500 million NYSE listing, but didn’t follow through on the debut that was supposed to take place this week, the FT reports. The Shanghai company was set to list in New York as early as May but was pressured by regulators, including the CAC, to debut in the Asian financial hub instead, according to Reuters. Podcast and radio platform Ximalaya dropped its NYSE listing plans in recent weeks after discussions with regulators yielded an understanding that “a Hong Kong listing would be regarded as a preferred outcome,” a source told the Financial Times. None of the five companies replied to Fortune’s request for comment. The value of the five shelved IPOs exceeds $1.4 billion, according to Refinitiv data. this year.Īll five companies that have delayed their IPOs operate high-tech app platforms that accumulate, store, and deploy important consumer data, from health to lifestyle to location information-exactly the kind of troves Beijing wants to protect. IPOs around the time of Beijing’s action against Didi or just before it, bolstering the case that the new regulatory campaign will slow down or halt Chinese listings on American exchanges and casting doubt on the 17 other Chinese IPOs that are planned for the U.S. The Chinese state is ensuring that tech companies’ data, and those who control it, “remain well within China’s sphere of influence,” wrote Michael O’Rourke, chief market strategist at JonesTrading on Wednesday.įour other Chinese firms halted their U.S. that may face similar questions over the way they store data,” said a July 5 Gavekal Research note. Beijing’s recent moves “pose big risks for Chinese listing candidates in the U.S.
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