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Does Xiaomi and Baidu-backed EV sensor maker Hesai’s US$190 million Nasdaq debut suggest a return of Chinese IPOs in US?
- The largest US IPO by a Chinese firm in 15 months gives investors an opportunity for exposure to the booming electric-vehicle (EV) market
- A rush of new US listings by Chinese firms is not likely given economic headwinds and damaged balance sheets, analysts say
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Sensor maker Hesai Group has raised US$190 million in the largest US initial public offering (IPO) by a Chinese company in 15 months as investors jumped on an opportunity for exposure to the booming electric-vehicle (EV) market, while analysts cautioned that the listing does not signal a return to the frenzied pace of Chinese IPOs a couple of years ago.
The Nasdaq IPO of Xiaomi and Baidu-backed Hesai, which develops and makes sensors for self-driving cars, is the largest IPO by a Chinese company since the US$334.5 million listing of Lianbio in October 2021, according to data from Refinitiv.
The sub-billion IPO, compared with the average deal size of US$347 million in 2021 and US$401 million in 2020, does not indicate a solid comeback by Chinese companies yet, experts said, citing economic headwinds, a tepid capital market and the damaged balance sheets of Chinese companies.
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“While Hesai’s IPO has certainly lightened the mood in the air, it is still early days to say if there will be a revival of Chinese companies pursuing listings in the US, given the macroeconomics and geopolitics at play,” said Wang Hang, a partner in Baker McKenzie’s capital markets practice in Beijing.
The strong performance of China’s stock market recently could also influence Chinese companies as they consider listing venues, Wang said.
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