Several Chinese firms are considering initial public offerings (IPOs) in the US, despite ongoing market turmoil and escalating trade tensions between Washington and Beijing. According to sources familiar with the matter, Beijing Smart Walnut Education Technology Co, operator of Walnut Coding, is among the companies exploring US listings. The firm is reportedly seeking to raise approximately $100 million (RM438.4 million) through the IPO.
Other Chinese companies considering US listings include computing infrastructure provider Shenzhen Cloudsky Technologies Co, as well as software service platforms Zaihui and Zhonghe Group. These companies may also aim to raise around $100 million each through their respective IPOs.
The plans for these listings are progressing despite the looming threat of potential delistings from US exchanges. US Treasury Secretary Scott Bessent recently stated that all options are “on the table” regarding the matter, amid ongoing trade negotiations with China.
The Nasdaq Golden Dragon China Index, which tracks US-listed Chinese companies, has declined by 23% since March 17. In comparison, the S&P 500 has fallen by 9% during the same period. The sources, who wished to remain anonymous due to the private nature of the discussions, emphasized that no final decisions have been made regarding the share sales, and the companies may ultimately decide not to proceed.
A representative for Walnut Coding, which has received backing from private equity firms KKR & Co and Hillhouse Investment, declined to comment on the matter. Representatives from Zaihui, Zhonghe, and Cloudsky did not respond to requests for comment.
The number of Chinese companies listing in the US has decreased since Didi Global Inc’s unsuccessful IPO in 2021. This event triggered a regulatory crackdown on China’s internet sector and led to an order for the ride-hailing company to delist from US exchanges.
Despite these challenges, the US market remains attractive to Chinese companies due to its high liquidity. Investment banks also stand to earn higher fees from share sales in the US compared to other markets, such as Hong Kong. Recently, tea chain Chagee Holdings Ltd successfully raised $411 million through its US IPO, pricing at the top end of its marketed range. The company’s shares surged by 16% on their debut.
