Chinese start-ups still crave US investors despite IPO challenges, bilateral friction

Once a license to print money, Chinese initial public offerings have been tarnished by opaque finances, scandals and Didi Global’s sudden NYSE delisting in 2022

Investors say the focus ahead is on relatively sure-bet Chinese companies with believable numbers and known brands

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Published: 10:00pm, 8 Feb 2024Updated: 9:56am, 10 Feb 2024

Scage, a start-up vehicle maker, repurposed a Nanjing diesel lorry factory in 2019 into a plant making clean-energy trucks. Now its founders are hoping for another transformation as they try to raise US$100 million on New York’s Nasdaq exchange and jump-start the nascent EV company into a global leader.

“We want to build a 100-year company,” said Ethan Guo Yuanchi, a former investment banker who co-founded Scage. “Even though the relationship between China and the US is complicated right now, for the past 20 years very good, mature Chinese companies go to Nasdaq or the New York Stock Exchange.”

As China’s economy and financial system swoon, capital -hungry Chinese companies are keen to tap US markets, hoping 2024 will reopen the sluice gates after a protracted drought.

Less clear is whether the largest, most attractive Chinese companies want to navigate the shifting maze of impediments for a US listing – and how interested foreign investors are.

Ethan Guo Yuanchi, a co-founder of Scage. Photo: Handout

Once a license to print money, Chinese initial public offerings (IPOs) have been tarnished by opaque finances, scandals and rideshare company Didi Global’s sudden NYSE delisting in 2022 following a Chinese crackdown on the tech sector, wiping away US$60 billion, just 11 months after its IPO.

Adding to the headwinds was US Commerce Secretary Gina Raimondo’s August warning that Chinese companies risked becoming “uninvestible” over national security concerns.