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China’s Star Board a Serious Contender to New York, Hong Kong Markets

China’s Star Board a Serious Contender to New York, Hong Kong Markets

Just over a year after its inception, Shanghai’s tech-focused Star board is emerging as a serious alternative to markets like New York and Hong Kong for China’s startups seeking to go public.

WM Motor Technology Co. is the latest high-profile company to weigh an initial public offering on Star’s platform, after Jack Ma’s Ant Group announced it would seek a landmark dual listing in Shanghai and Hong Kong in what would be one of the largest debuts in years.

Prior to the Star Board’s inception, Chinese tech firms and startups tended to flock to either New York or Hong Kong for their IPOs, attracted by the more relaxed rules around listing and trading as well as the international pools of capital. Tech heavyweights like Tencent Holdings Ltd., Alibaba Group Holdings Ltd. and JD.com Inc. are all listed in either Hong Kong, New York, or more recently, both. But the Star board did away with a lot of China’s red tape and tight controls on the types of companies it accepted, and over 130 companies have raised a combined $30 billion from the venue over the last 12 months.

One of the more recent big-name floats on the Star board was a listing by China’s top chipmaker, Semiconductor Manufacturing International Corp., which raised $7.6 billion in this year’s largest initial share sale globally. Ant’s IPO is likely to be another of the world’s biggest listings, either this year or next.

Having an alternative to New York is more important than ever as relations between China and the U.S. continue on a downward spiral, with threats being made to curb Chinese companies’ continued access to American capital markets. Many U.S.-traded Chinese firms are considering second listings in Hong Kong as a way to hedge against that risk and expand their investor base closer to to home. Alibaba, JD and NetEase Inc. have already raised billions of dollars through their share sales in the city.

READ MORE: Houston Spat Adds to Reasons for China IPOs to Favor Shanghai

For now, bankers don’t expect the Star board to become an alternative to Hong Kong for those U.S.-traded firms looking at a second listing, given it would be a lot harder for investors holding the U.S. stock to transfer their holdings to mainland-traded shares than to Hong Kong.

UPCOMING LISTINGS:

  • Li Auto
    • Nasdaq
    • Size $1b
    • Filed July 10
    • Goldman Sachs, Morgan Stanley, UBS, CICC
  • Hangzhou Tigermed Consulting
    • Hong Kong stock exchange
    • Size $1b
    • Pre-marketing July 20-24
    • BofA, Haitong, CLSA, CICC
  • Gland Pharma Ltd.
    • India stock exchanges
    • Filed July 10
    • Citi, Haitong, Nomura, Kotak
  • Mindspace REIT
    • India stock exchanges
    • Size up to $598m
    • Anchor books open July 24, listing around Aug. 12
    • Morgan Stanley, BofA, Axis Capital, Citi, JM Financial, Kotak Mahindra, CLSA, Nomura, UBS, Ambit Capital, HDFC Bank, IDFC Bank, ICICI Securities
  • AREIT
    • Philippines stock exchange
    • Raised $250m
    • Trading Aug. 13
    • BPI Capital, UBS

More ECM transactions we are following:

  • WM Motor Technology Co. is weighing an initial public offering in Shanghai as rival electric vehicle manufacturers battle for a domestic market increasingly dominated by Tesla Inc., said people familiar with the matter
  • China’s Hozon Auto is seeking financing on the way to a planned initial public offering, betting on rising demand in rural areas for its electric cars that start at less than $10,000
  • Sino Biopharm CEO to sell 300 million shares at HK$10.5 each
  • Waterdrop Inc. is preparing for an initial public offering as soon as this year, seeking a valuation of about $4 billion, according to people familiar with the matter
  • World’s hottest IPO market is creating a billionaire each week

See also:

  • Asia ECM Weekly Agenda
  • IPO data
  • U.S. ECM Watch
  • EU ECM Watch
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