Chinese firms are listing in the US at a record-breaking pace

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WASHINGTON (BLOOMBERG) – Chinese companies are listing in the United States at the fastest pace ever, brushing off tensions between the world’s two biggest economies and the continued risk of being kicked off American exchanges.

Firms from the mainland and Hong Kong have raised US$6.6 billion (S$8.7 billion) through initial public offerings in the US this year, a record start to a year and an eightfold increase from the same period in 2020, data compiled by Bloomberg show.

The largest IPO is the US$1.6 billion listing of e-cigarette maker RLX Technology, followed by the US$947 million offering of software company Tuya.

That’s even as Sino-US tensions show few signs of easing and the threat of Chinese firms being delisted from US exchanges remains.

In fact, the US Securities and Exchange Commission said last month it would begin implementing a law forcing accounting firms to let US regulators review the financial audits of overseas companies. Non-compliance could result in a delisting from the New York Stock Exchange or Nasdaq.

The risk for mainland firms is high given China has long refused to let US regulators examine audits of its overseas-listed companies on national security concerns.

“They would acknowledge this is a potential risk, and if something happens they might need to get prepared for a rainy day,” said Ms Stephanie Tang, head of private equity for Greater China at law firm Hogan Lovells.

“But the risk itself would not prohibit those companies from going to the US, at least in the second half of this year or probably toward next year.”

Despite all the risks, the pipeline continues to grow, setting up 2021 to potentially exceed last year. Chinese firms raised almost US$15 billion through US IPOs in 2020, the second highest on record after 2014, when e-commerce giant Alibaba Group Holding fetched US$25 billion in its float.

Didi Chuxing has filed confidentially for a multi-billion-dollar US IPO that could value the Chinese ride-hailing giant at as much as US$100 billion, Bloomberg News has reported.

Uber-like trucking startup Full Truck Alliance is