It can be expected that after the difficulty of listing in the United States, the HKEx and the domestic GEM will become the best choice for SMEs.
According to Reuters, Nasdaq has recently tightened the restrictions on IPOs in Chinese SMEs, and the application time has also been lengthened. The reason behind this is the hype the funds of these stocks, many from China, not American investors. Nasdaq may limit their issuance of shares.
Many times, these post-IPO shares are flowing in some small circles. This runs counter to the original intention of Nasdaq to attract more large institutional investors. Take the 111 group listed on the Nasdaq as an example. The $100 million it raised at the IPO was mainly sold to the management’s relationship households. In addition to the 111 Group, Nasdaq-listed companies such as Han Holdings and Park Sun Education are more speculators than Chinese investors.
Listing to the Nasdaq is one of the main paths for VCs to realize. Aiqiyi, B station, fighting fish, fighting a lot, Ctrip, Netease and other star companies, are listed on the NASDAQ. In the US trading market, there are currently 156 Chinese listed companies with a market capitalization of $1.2 trillion.
In 2018, China’s stocks were brought together in the United States.31 Chinese stocks raised a total of 8.5 billion US dollars on the main board of the US Stock Exchange and Nasdaq, accounting for the whole One-sixth of the funds raised. The four largest IPOs are taken over by Chinese companies: Iqiyi, Weilai Auto, Pinduo and Tencent. In 2019, the pace of the Chinese stock market Xidu did not slow down. Ruixing Coffee raised 100 million US dollars on the Nasdaq, and it took only 18 months from its establishment to its listing.
Nasdaq tightened its IPO, making this exit path even more difficult. White House economic adviser Kudlow said that the plan to let Chinese companies withdraw from the US has not been put on the table. However, the regulation of Chinese companies’ listings is becoming more and more strict.
It is expected that after the difficulty of listing in the US, the HKEx and the domestic GEM will become the best choice for SMEs. Also in 2018, 44 mainland companies listed on the Hong Kong Stock Exchange, raised $32 billion, almost three times that of 2017. Digestion at home may become the mainstream choice for Chinese companies to list in the future.