The Growing Presence of Chinese Companies Listed on the U.S. Markets
FinancialBuzz.com News Commentary
30 Oct, 2017, 09:00 ET
LONDON, October 30, 2017 /PRNewswire/ --
This year, many Chinese companies have chosen to go public in the United States. According to an article from Frontra, 13 Chinese companies went public on the U.S. stock exchanges so far in 2017 and with about $2.4 billion raised in the Initial Public Offerings (IPOs). Most of these companies listed this year in the U.S. markets are fintech and education companies. According to another article from South China Morning Post, there were 168 Chinese companies trading in the US, a significant portion of which are internet and technology companies. Dragon Victory International Limited (NASDAQ: LYL), Qudian Inc. (NYSE: QD), China Internet Nationwide Financial Services Inc. (NASDAQ: CIFS), China Rapid Finance (NYSE: XRF), Alibaba Group Holding Ltd. (NYSE: BABA)
Offshore listings will give Chinese companies better international exposure. Brock Silvers, managing director at Kaiyuan Capital. Said: "Chinese companies favor offshore listings to enable hard currency fundraising and gain access to a broader international investor base and among offshore listings, the US is the most highly desired," Also, less stringent regulatory environment in the U.S. than in the Mainland China and Hong Kong are one of the factors that Chinese companies prefer offshore IPOs. "Hong Kong also has a more stringent regulatory environment than the US, and that's another strong reason why Chinese firms are flocking to the US." Jasper Lo, senior vice-president at iBest Finance, said.
Dragon Victory International Limited (NASDAQ: LYL) announced breaking news last week that, "the Company has entered into a Strategic Cooperation Agreement (the "Agreement") with Shenzhen 708090 Investment and Development Co., Ltd ("708090"), a leading provider of shared workspace, community, and services for entrepreneurs, freelancers, startups and small businesses, for incubation development services in China.
The objective the collaboration between the two parties is to help startups, especially entrepreneurial ventures by college students, grow to the next level. Pursuant to the Agreement, 708090 will not only provide startups with office spaces, facilities and logistics, but also provide support in due diligence, preferential financial support, media outreach, and projects docking. LYL will provide comprehensive strategic planning, marketing, connections, mentoring and business services, such as business registration, accounting, legal, human resources, and market research to the startups. Additionally, 708090 and LYL may introduce additional funding sources to the startups.
The cooperation between LYL and 708090 includes many business initiatives, which allows the Company to share 708090's significant resources to explore business opportunities in Shenzhen and Hong Kong. LYL and 708090 will work together on continuing business model innovation and build the Company's brand reputation to achieve enhanced marketing and continued growth."
Mr. Jianjun Sun, Chairman and Chief Executive Officer of Dragon Victory International Limited, commented, "Our partnership with Shenzhen 708090 Investment and Development Co., Ltd reinforces our commitment to serve entrepreneurial ventures in our incubator by striving to expand cooperation with governments and chambers of commerce. The cooperation agreement opens doors to exciting opportunities for Chinese startups and helps entrepreneurs to realize their career dreams. We plan to establish a most influential college students' entrepreneurial incubator in Shenzhen and have some key government projects in 2 years. We see this partnership as our latest step in advancing Dragon Victory's stature as a leader in entrepreneurship."
Qudian Inc. (NYSE: QD) is a leading provider of online small consumer credit in China. With the mission to use technology to make personalized credit accessible, the company targets hundreds of millions of young, mobile-active consumers in China who need access to small credit for their discretionary spending, but are underserved by traditional financial institutions due to lack of traditional credit data and operational inefficiencies of traditional financial institutions. On October, 2017, the company announced the pricing of its initial public offering of 37,500,000 American depositary shares ("ADSs") at a price to the public of US$24.00 per ADS for a total offering size of approximately US$900.00 million. Of the total 37,500,000 ADSs offered, 35,625,000 ADSs are being offered by the Company and 1,875,000 ADSs are being offered by selling shareholders.
China Internet Nationwide Financial Services Inc. (NASDAQ: CIFS) provides financial advisory services, including commercial payment advisory, intermediary bank loan advisory, and international corporate financing advisory, to meet the financing and capital needs of its clients, comprised largely of small-to-medium sized enterprises ("SMEs"). On August 08, 2017, the company announced the pricing and closing of its initial public offering of 2,023,146 of its ordinary shares at a price to the public of $10.00 per share for a total of $20,231,460 before underwriting discounts and commissions and offering expenses.
China Rapid Finance (NYSE: XRF) operates one of China's largest consumer lending marketplaces in terms of total number of loans, having facilitated approximately 15 million loans to approximately 2 million borrowers at significantly lower borrowing costs than many of its competitors. On April 28, 2017, the company announced today that its initial public offering of 10,000,000 American depositary shares was priced at US$6.00 per ADS, with a total offering size of US$60 million. The ADSs have been approved for listing on the New York Stock Exchange and are expected to begin trading on April 28, 2017 under the symbol "XRF."
Alibaba Group Holding Ltd. (NYSE: BABA) enables businesses to transform the way they market, sell and operate. The company provides the fundamental technology infrastructure and marketing reach to help merchants, brands and other businesses to leverage the power of the Internet to engage with their users and customers. Alibaba Group goes public on the New York Stock Exchange in September 2014. Alibaba operates various businesses. Its major businesses and the businesses include Ant Financial Services Group. Ant Financial is dedicated to building an open ecosystem of Internet thinking and technologies while working with other financial institutions to support the future financial needs of society. Businesses operated by Ant Financial Services Group include Alipay, Ant Fortune, Zhima Credit and MYbank. Ant Financial took the lead in founding MYbank. MYbank is a private online bank established on June 25, 2015 with a mission to serve small and micro enterprises, to support the real economy and to practice inclusive finance. MYbank strives to be a pioneer in private online banks and also a practitioner of inclusive finance, so as to provide efficient and convenient financial services to small and micro enterprises as well as individual entrepreneurs.
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