IPOs in Asia in the US are expected to increase as the region’s economies recover, says Nasdaq vice chairman

Huang Ping, the Chinese Consul General in New York, rang the opening bell on Nasdaq on Jan. 25.

Courtesy of Nasdaq

In 2019, the year before Covid turned global travel and business upside down, the Nasdaq attracted 33 listings from Asia Pacific companies. All but five were from China, underscoring the country’s weight as the world’s second largest economy and the strength of its technology sector. Chinese internet billionaires who have listed their major businesses on Nasdaq over the years include Robin Li, chairman of Baidu, and Richard Liu of JD.com.

As Asia helps spur a global economic recovery from Covid this year, listings from the region could surpass pre-Covid numbers, Vice Chairman Robert McCooey Jr said in an interview. “Our pipeline is super strong,” McCooey said via Zoom, citing 94 active “F-1” filings with the Securities and Exchange Commission from Asia-Pacific companies looking to go public.

However, Chinese companies and entrepreneurs who led the way in 2019 may have to share the stage with those from other Asian nations this year, McCooey said. While it’s impossible to say with certainty how many will pull through, McCooey noted that only about half of those F-1 applicants are from Chinese companies.

“If you rewind the clock three, four, five years, 80% of them would have been Chinese and just a small number from other parts of Asia,” he said, including Singapore, South Korea and Japan. “The fact that 50% of them are from China is great, but I think it shows where the market has shifted in recent years,” McCooey said. “We’re casting a broader net here that includes China, but also looks at Asia (as a whole).”

Of course, the Nasdaq is mostly for US companies — they make up about 80% of the 4,000 companies that trade there. However, the remaining 20% ​​- or about 800 – are based abroad. The largest include China’s JD.com and China’s Trip.com. Even amid the pandemic last year, a total of 48 international listings came to Nasdaq (including SPAC IPOs), 30 of which were from the Asia-Pacific region. Some of the biggest listings in 2022 were Gogoro, a Taiwanese operator of a battery swapping platform and scooter manufacturer, and Atour Lifestyle Holdings, an operator of a hotel chain in mainland China.

Partly due to travel difficulties during the pandemic, a backlog in international listings remains this year, said McCooey, a 15-year Nasdaq veteran who oversees IPOs from Asia and Latin America. A shadow lifted over China’s fundraising in December when US regulators said they had reached an agreement on scrutiny of China-listed companies that had caused new listings from the country to come to a near halt. This week, Hesai Group, a supplier of sensors for self-driving vehicles whose investors include Baidu and smartphone maker Xiaomi, is expected to go public. So far this year there have been four other international listings on Nasdaq, three of which were from Asia Pacific: Cetus Capital Acquisition, Quantasing Group and Lichen China.

Aside from the easing of Covid-related restrictions in China itself, hopes for a rebound in China’s Nasdaq listings were boosted when Huang Ping, head of the Chinese consulate in New York, rang an opening bell to mark the Lunar New Year last month.

Whether China actually wins will also depend in part on the confidence of stock market participants and investors alike, he said. “Success breeds success,” said McCooey, 57. “That’s what my dad always said.” The more companies that go public and thrive, the more confidence others need to have to follow them and take that path, McCooey said.

Nasdaq Vice President Robert H. McCooey, Jr.

Courtesy of Nasdaq

Another challenge this spring for Chinese firms and their underwriters will be the aftermath of the US launch of the suspected spy balloon stoking fears of the Cold War. McCooey said he doesn’t expect any impact on listings. “US-China tensions have persisted for decades,” he said. “They’re just sometimes given more emphasis in the press during certain periods.”

Also potentially poised for a good year in 2023, McCooey believes: Southeast Asian Listings. “Businesses in the region have grown tremendously,” he said. “Companies have now grown to a size and scale” and in industries associated with the Nasdaq, such as technology, healthcare, consumer logistics and robotics, McCooey said. “They are interested in the US market and growing.”

Among the 18 Asia-Pacific companies that have filed F-1s since December, four are from Singapore, including CytoMed Therapeutics, a biotech company, and IMMRSIV, a software company.

“A lot of money has come to Singapore from other parts of Asia. It’s seen as a sort of Switzerland of Southeast Asia, and it’s warm and welcoming,” he said. “Many people feel comfortable there, many companies feel comfortable there and the business climate is good there. There are simply a lot of factors currently working in (Singapore’s) favour. And then, given some of the ongoing geopolitical tensions, companies obviously (will) try to break away from that. Although India hasn’t represented many international Nasdaq issuers recently, due to the country’s restrictions on direct listings abroad (companies must list at home first), McCooey said he’s also optimistic that more companies from the country will seek to the US to open up markets.

Batteries for Gogoro scooters sit in a charging station in Taipei; The Al Gore-backed company went public on the Nasdaq last year. Photographer: Billy HC Kwok/Bloomberg

© 2018 Bloomberg Finance LP

“I’ve been a big believer in India for years,” said McCooey, a graduate of the College of the Holy Cross in Worcester, Massachusetts. “It’s just too big, an amazing and amazing market, for us not to see it that way. It’ll just take a while.”

See related posts:

The toolmaker’s IPO shapes China’s latest billionaire

US tops new Asian power ranking ‘mainly due to China’s setbacks’

China’s luxury goods market is set to recover, says Bain

Language gaps hold US companies back in fast-growing Asia: KPMG Economist

@rflannerychina