China’s new IPO rules could hinder companies from bike-rental firm Hello to Spark Education preparing for US listings

Name: China kicks off antitrust probes into Alibaba over alleged monopolistic practices
Uploaded: 2021-07-07T12:00:21.000Z
Duration: 1 min 26 s
Description: China kicks off antitrust probes into Alibaba over alleged monopolistic practices

More than 20 Chinese companies have filed paperwork to pursue US listings this year, with dozens more expected

Beijing said it would undertake a sweeping overhaul of its regulations on how companies raise capital both domestically and overseas

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Nearly three dozen Chinese companies raised an eye-popping US$12.5 billion through IPOs in the US in the first half of this year. Photo: Reuters

Chad BrayandEnoch Yiu

Published: 8:00pm, 7 Jul 2021Updated: 11:21am, 12 Jul 2021

Alibaba Group Holding-backed bike rental company Hello, Tencent-backed Spark Education and medical data solution provider LinkDoc Technology are among more than a dozen Chinese companies that could face challenges to their listing plans in the US after Beijing announced it was tightening its rules on initial public offerings.

China’s State Council said late on Tuesday it would undertake a sweeping overhaul of its regulations on how companies raise capital both domestically and overseas, which could stymie efforts for high-flying technology companies to access the American capital markets.

The announcement comes after nearly three dozen Chinese companies raised an eye-popping US$12.5 billion through IPOs in the US in the first half of this year. More than 20 companies have filed paperwork to pursue listings on American bourses, with dozens more waiting in the wings, according to regulatory documents reviewed by the Post.

The new rules could slow what has been a steady stream of listings by Chinese firms in the US, but are not likely to end them completely as American financial markets remain some of the deepest and most liquid in the world and are still attractive to Chinese entrepreneurs, particularly the founders of technology firms, according to accountants, lawyers and other deal makers.

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China kicks off antitrust probes into Alibaba over alleged monopolistic practices

“It will be inevitable that some Chinese companies may hold up their US listing plan as they will check on how they can comply with the new mainland regulation,” said Tom Chan Pak-lam, chairman of the Hong Kong Institute of Securities Dealers, the industry body for local brokers in the city.