Key facts
- China's onshore technology IPOs are on track for their strongest year since 2023.
- Technology companies have raised $3.1 billion from stock market listings in China by June 18, a fivefold increase year-on-year.
- Nearly 50 companies have applied for IPOs in Shanghai and Shenzhen, with fundraising plans totaling at least 126.1 billion yuan ($18.7 billion).
- Regulators are supporting listings in 'future industries' like quantum technology and AI.
- Memory-chip maker ChangXin Memory Technologies plans a 29.5 billion yuan Shanghai IPO, potentially the largest this year.
China's onshore technology IPO market is experiencing a significant resurgence, driven by government efforts to promote domestic chip and artificial intelligence companies amid geopolitical tensions with the U.S. As of June 18, technology firms had raised $3.1 billion through stock market listings in China, a more than fivefold increase compared to the same period last year, according to LSEG data.
Nearly 50 companies, including those in robotics and semiconductors, have submitted applications for initial public offerings on the Shanghai and Shenzhen exchanges. These companies collectively plan to raise at least 126.1 billion yuan ($18.7 billion). Memory-chip maker ChangXin Memory Technologies is among the hopefuls, planning a 29.5 billion yuan IPO in Shanghai that could be the year's largest and push total listing values to a three-year high.
The acceleration in domestic listings follows statements from Chinese regulators on June 17, indicating support for startups in emerging fields such as quantum technology, nuclear fusion, and brain-computer interfaces. The Shanghai Stock Exchange has also introduced new rules to facilitate public share sales by large-language-model companies on its STAR Market, aiming to bolster homegrown AI firms.
Li He, co-head of law firm Davis Polk's Asia (ex-Japan) practice, noted that the increased pace of technology IPOs provides much-needed exit opportunities for private equity and venture capital investors. This push for domestic listings marks a shift from a period of hiatus and a move away from some companies previously seeking offshore capital.
The China Securities Regulatory Commission (CSRC) has also expressed support for qualified Hong Kong-listed companies seeking to list on mainland exchanges. Kenny Ng, a strategist at China Everbright Securities International, believes this could enhance market liquidity and offer investors more diversified choices. Companies like Zhipu AI, which previously listed in Hong Kong, are now targeting STAR Market listings for substantial funding. Baidu's chip unit, Kunlunxin, is also reportedly planning a domestic float.
Citigroup's Ho-Yin Lee highlighted that mainland listings can offer Hong Kong-traded companies access to a larger investor base, significant capital pools, and enhanced domestic branding. Strong investor demand for recent mainland tech IPOs, such as the substantial share price surges for SJ Semiconductor Corp and Semight Instruments, further fuels optimism for the domestic listing market. Goldman Sachs' James Wang views this trend as part of a global AI wave, with China and the U.S. leading the charge.