Chinese IPOs in the US have been making a comeback... of sorts
Even with ~$6 billion tea giant Chagee now in the mix, the current landscape still seems to be deterring bigger names.
Strange as the timing may seem, given the broader geopolitical picture, many Chinese companies are seeing 2025 as the year to hit the US public market. Last week, tea giant Chagee soared 21% on its Nasdaq debut to hit a $6.2 billion valuation, while a flurry of tech firms are reportedly looking to follow suit, per Bloomberg.
Red wave
Chagee’s $411 million raise last Thursday made it the largest Chinese consumer company listing in the US since 2021, momentarily bucking the drought of big Chinese initial public offerings that had been attributed to deteriorating relations between the two nations. Still, even against the backdrop of President Trump’s ongoing tariffs, postponed IPOs from other companies, and talk of Chinese stocks being delisted from US exchanges, 2025 has largely picked up where last year left off in terms of enticing companies looking to list in the US.
There was once a time when Chinese tech companies deciding to go public in America would shake Wall Street, like e-commerce behemoth Alibaba’s IPO in 2014, which initially raised $21.8 billion and was later valued at $25 billion, making it the largest in history at the time. While a host of companies followed suit, the surge wasn’t to last: after Chinese ride-hailing company DiDi Global decided to go public on the NYSE in 2021 — despite not getting the green light from Beijing regulators — it was forced to delist by the Chinese government, complicating the listing process ever since.
The tide has been slowly shifting recently, with Chinese offerings on the US market up almost 47% in 2024 compared to the year before, per data from US-China Economic and Security Review Commission (USCC). However, the precarious regulatory landscape was clearly a hurdle that many bigger companies were wary of even before the latest tariffs, with the 37 offerings in 2024 worth just $1.9 billion, down from $10.7 billion just four years earlier.
Interestingly, there had already been 11 offerings from companies based in Shanghai, Beijing, and beyond by March 7 this year, according to the USCC, as China’s government continues to boost and protect its domestic businesses.
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