Chinese tech firm’s 890 per cent debut on Nasdaq underlines appetite for IPOs amid China’s efforts to defuse audit, delisting tensions
- Ostin Technology, a maker of display modules, gained 892 per cent to US$39.66 on Nasdaq, raising US$13.5 million
- Despite the auspicious debut and positive signs in the discussions between the US and China, companies will remain cautious about listings in the US, an analyst said
Ostin Technology, a low-key technology company, made an electrifying debut as the first Chinese stock offering in the US since February, underlining strong appetite even as regulatory officials remained at odds over audit and delisting issues.
The supplier of display modules and polarisers soared 892 per cent on Nasdaq to US$39.66 on Wednesday, giving it market value of US$535.4 million. The company raised US$13.5 million in gross proceeds by selling 3.38 million shares at US$4 each.
Ostin’s factories in Nanjing, a mainland city in eastern Jiangsu province, produce display parts used in consumer electronics, outdoor LCD displays, and automotive panel displays.
The first Chinese IPO since Meihua International Medical Technologies’ listing in mid-February shows Chinese firms are still eager to tap the world’s biggest capital market, as China voiced support for such fundraising. Fears of mass delisting of US-listed Chinese stocks, with an estimated US$1.3 trillion of market capitalisation, have fanned an exodus to Hong Kong and weighed on local equity markets.
Beijing has shown willingness to make changes, as the CSRC on April 2 withdrew a requirement that only Chinese regulators conduct on-site audit inspections of Chinese companies listed overseas. China denies access to the US’s Public Company Accounting Oversight Board (PCAOB), citing state secret concerns among others. The new rules also require listed companies and their accountants to decide what is sensitive information and what cannot be handed over to US regulators.