Key facts
- China's onshore technology IPOs are on pace for their strongest year since 2023, driven by AI and chip companies.
- Technology firms have raised $3.1 billion through IPOs in China as of June 18, a more than fivefold increase from the previous year.
- Nearly 50 tech companies have applied for IPOs in Shanghai and Shenzhen, seeking to raise at least 126.1 billion yuan ($18.7 billion).
- Regulators are actively supporting listings in 'future industries' and AI companies, including large-language-model firms.
- This rebound offers much-needed exit opportunities for private equity and venture capital funds.
China's onshore technology IPO market is experiencing a significant rebound, with AI and chip companies at the forefront, as Beijing prioritizes tech self-reliance amid geopolitical tensions with the U.S. As of June 18, technology companies have raised $3.1 billion from stock market listings in China this year, a more than fivefold increase compared to the same period last year.
Nearly 50 companies, including robotics startups and semiconductor firms, have applied for initial public offerings in Shanghai and Shenzhen, with total fundraising plans reaching at least 126.1 billion yuan ($18.7 billion). Memory-chip maker ChangXin Memory Technologies is planning a 29.5 billion yuan IPO in Shanghai, which would be the largest this year and could push total listing values to a three-year high.
This acceleration in tech IPOs is supported by Chinese regulators who have pledged to back startups in emerging fields like quantum technology and brain-computer interfaces. The Shanghai Stock Exchange has also introduced specific rules to facilitate listings for large-language-model companies on its STAR Market, aiming to foster domestic AI innovation.
"The acceleration of technology IPOs has provided long-awaited exit opportunities for private equity and venture capital funds that have backed these companies," said Li He, co-head of law firm Davis Polk's Asia (ex-Japan) practice. The push for domestic listings marks a reversal from a previous trend where some companies sought offshore capital, occurring amidst a broader China-U.S. tech rivalry.
The China Securities Regulatory Commission (CSRC) has also stated its intention to support qualified Hong Kong-listed companies seeking mainland listings, a move expected to broaden market access and improve liquidity. Companies like Zhipu AI, which previously listed in Hong Kong, are now aiming for STAR Market listings, and Baidu's chip unit, Kunlunxin, is reportedly planning a smaller domestic float.
Strong investor demand for recent mainland tech IPOs, such as SJ Semiconductor Corp and Semight Instruments, has further fueled optimism. "The pickup in Chinese tech issuance is part of a broader global AI wave, with China and the U.S. the two markets that set the tone," noted James Wang, head of Asia ex-Japan equity capital markets at Goldman Sachs.