Feb 23, 2021 (China Knowledge) - Venture firm DCM raised USD 5.32 bln from Chinese social media app Kuaishou’s IPO that took place on HKEX rather than in the U.S. As DCM co-founder David Chao predicts that the Chinese’s most prominent tech start-ups would follow suit. The main reason of avoiding listing in U.S exchange is because of the past four years of the Trump Administration’s political bashing of its Chinese companies.
Previously, U.S exchanges have been highly zealous of attracting Chinese companies. China’s biggest e-retailer, Alibaba went public on the Nasdaq in 2014. It is sad to see that the trend has shifted away from U.S as China’s tech companies made a choice to stay closer to home. For example, Hong Kong Stock Exchange – the world’s fourth largest exchange in terms of the market cap of listed companies, trailing behind New York, Nasdaq and Shanghai.
Kuaishou raised HKD 41.28 bln in its IPO and the shares jumped almost 200% on debut (Feb 5). It continued to rise in the first 2 weeks, giving the company a market cap of about HKD 210 bln.
Kuaishou's debut has resulted many listed companies to review and look at the Chinese market for future potential listing opportunities. It is inevitable that many Chinese start-ups will choose to list close to home as Shanghai Exchange is as good as the U.S Exchanges less politicization of interests.
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