The entry into 2025 has marked a significant resurgence for Chinese companies on the American stock market,demonstrating a positive trajectory in their investment and market expansion strategies.On January 7,Zhenye Biological,a producer of animal vaccines,made a notable debut on the U.S.market with a 21.50% surge on its first day of trading.In addition,the robotic arm manufacturer,Qindifo,successfully listed in the U.S.on January 2,with both companies together reflecting a 43% rise in stock prices over just two trading days.Furthermore,several other companies,including Jiaji Technology,Zhongyi Capital,and Daoyuan Group,have recently filed for IPOs to list on Nasdaq,showcasing a robust trend of Chinese enterprises seeking opportunities in the United States.

2024 was a remarkable year for Chinese firms looking to go public in the U.S.,both in volume and financial backing.According to statistics from Wind,61 companies raised $3.02 billion throughout the year,a massive leap compared to the mere 33 listings and $931 million raised in 2023.This extraordinary turnaround can be attributed to a handful of influential firms,such as Zeekr,a subsidiary of Geely focusing on electric vehicles,ANTA's Amer Sports,and the prominent autonomous driving ventures,WeRide and Pony.ai,which made waves in the market.

Wen Tian Na,President of Hong Kong Bodao Capital International,suggests that these developments reflect a warming market sentiment and an increased determination from Chinese firms to expand their financing avenues overseas.

The first half of 2024 saw a dazzling performance from notable new stocks in the U.S.market.

Wind's statistics indicate that the financing amounts from Chinese firms showcased a stark contrast to previous years,marking a clear growth trajectory.The surge in listings has redefined the engagement dynamics of Chinese companies in international financing channels,firmly establishing the American capital market as a vital platform for global expansion.

In industry terms,the Technology,Media,and Telecommunications (TMT) sector,along with consumer services,led in terms of volume,with TMT firms dominating thanks to the significant contributions from autonomous driving entities WeRide and Pony.ai.Traditional sectors,such as packaged foods,apparel manufacturing,and logistics,also found successful pathways to U.S.stock exchanges.

Wen Huiya,Partner from Deloitte’s Southern Capital Markets Services,noted that while 2024’s data for Chinese firms finishing IPOs in the U.S.looks robust,it's predominantly driven by a small group of larger firms,like Zeekr,WeRide,Pony.ai,Flash Delivery,and Yunxuetang,which together raised $1.45 billion.This stands in stark contrast to the five largest firms from 2023,which cumulatively raised just $538 million,reflecting a staggering growth of 170%.

Among the Chinese firms that successfully listed,four exceeded the $100 million capital mark.Amer Sports made its trading debut on the NYSE on February 1,raising approximately $1.365 billion,marking the largest IPO globally since September 2023.Meanwhile,Zeekr entered the U.S.market on May 10,securing $441 million.Leading players in the self-driving arena,WeRide and Pony.ai,listed on October 25 and November 27,respectively,with WeRide raising $440 million and Pony.ai garnering $299 million,culminating in a total potential fundraising of around $452 million through concurrent private placements.

“If we exclude the larger companies leading the pack,many firms have targeted financing rounds under $10 million,yet the upward trend in U.S.listings remains vibrant,particularly as we saw in the fourth quarter,” Wen Huiya pointed out.

The quest for overseas market expansion has become essential for Chinese firms,propelled by the momentum of these illustrious IPOs.

According to Wen Tian Na,the substantial listing activity underscores a significant positive signal.The dramatic surge in both the number and amount of Chinese firms listing in the U.S.can be attributed to two primary factors.Firstly,there has been an overall improvement in the Chinese economy,with notable developments and highlights across various sectors,including technology and domestic demand.Secondly,last year's strong performance from the U.S.capital markets created a robust appetite for investment options,positioning Chinese companies—being one of the world’s largest economies—as attractive investment opportunities.

Deloitte highlighted that the ongoing enthusiasm and trends of Chinese companies pursuing listings in the U.S.are further influenced by an array of economic measures implemented in the second half of the previous year,resulting in a steady recovery of the Chinese economy and a growing willingness among firms to seek financing through IPOs.Given the tightening regulations expected in the A-share market in 2024,more smaller companies are inclined to pursue listings in the U.S.market instead.With the Federal Reserve reducing interest rates in September by 50 basis points and an additional 25 basis points in November,the robust performance of U.S.equity markets continues to entice companies to explore American capital markets.

Aiming for international expansion amid a saturated domestic market and fierce competition,Chinese firms see U.S.listings as a strategic imperative.By making their mark on the American stock exchanges,companies elevate their global presence,attract top-tier talent worldwide,and accelerate their international capital flow processes.

For instance,Zeekr registered a successful entry at the NYSE,validating Geely’s strategy to upscale its automotive portfolio.Initially positioned as a global brand,reports show that Zeekr has established a direct sales network in Europe and has commenced operations in Sweden,the Netherlands,and Germany.Analysts believe that going public in the U.S.market will enable Zeekr to capture more interest from international investors,further enhancing Geely’s brand image and its influence in the global arena.

WeRide,deemed the “first global public autonomous driving stock,” stands out as the only tech entity to possess autonomous driving licenses across four regions: China,the U.S.,the UAE,and Singapore.The company is devoted to developing safe and trustworthy autonomous technologies,and has conducted R&D,tests,and operations in 30 cities across seven countries worldwide.

Meanwhile,Rongye Food,a well-established name in Guangdong,marked its debut in the U.S.market on November 26,evolving from its traditional craft of producing preserved meats into a diversified enterprise.The company plans to use the raised capital for expanding production capacities,developing new offerings,upgrading the supply chain,and penetrating overseas markets.

However,challenges accompany these achievements,as the complexities and competitive dynamics of the U.S.market loom on the horizon.

From a market performance perspective,many of the companies listed in 2024 face discouraging stock price trends,with over two-thirds of new shares trading below their offering prices.While some,like Chang'an Energy,Xingji Fashion Culture,and Amer Sports,have seen their stock prices more than double since their debut,others like Zeekr,Tehai International,Pony.ai,and Rongye Food have achieved modest gains of 32.33%,30.27%,16%,and 13% respectively.

Moreover,navigating the intricacies of U.S.capitalization regulations introduces unpredictability.As of late,there has been a strong indication that the regulatory landscape for Chinese firms could tighten,necessitating rigorous compliance measures to mitigate potential risks.

Wen Tian Na expressed concern that the coming year holds various challenges for Chinese entities aiming for U.S.listings,including intensified competition from global economic dynamics,nuanced changes in local economies,and shifting international relations.A climate of unilateralism and protectionism has prevailed in international markets,presenting new hurdles across trade,technology races,and more.

“Chinese companies must weigh multiple perspectives,including the potential for U.S.policies to limit non-American enterprises from listing on American exchanges,” Wen Tian Na stated.

The stakes are higher,especially with recent developments.In December of 2024,Nasdaq revealed intentions to modify public stockholder market value calculations,requiring companies to fully meet minimum market value standards through IPO proceeds alone.This shift complicates the process for small and medium-sized enterprises aiming for listings.

Shen Jun,a partner at Tongshang Law Firm,noted that such regulatory alterations amplify the challenges for smaller firms.This could drive focused efforts on creating long-term value,necessitating a shift in business and growth strategies beyond just satisfying listing requirements through tactical maneuvers.For firms still gearing up to list in the U.S.,taking swift actions can be pivotal; those on the verge can expedite their preparations to file before new regulations take effect,capitalizing on the regulatory “window of opportunity.”

Despite the hurdles,the trend toward Chinese company listings in the U.S.maintains its remarkable momentum.Deloitte’s National Managing Partner for Capital Markets Services,Liu Qihong,noted that although 2025 might see more companies opt for listings in Hong Kong instead of the U.S.,a number of smaller Chinese entities,particularly from the tech sector,are likely to continue pursuing American markets.The reputation of the U.S.as a historical brand in international markets and its capacity to provide comparative value make it an attractive destination for innovation-driven firms looking for funding and visibility.