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More companies to seek listing in domestic market over US
Updated: 2015-11-27
( chinadaily.com.cn )
Fewer Chinese companies will seek listing in the United States in the coming years due to the broadened financing access and more attractive valuations in the domestic market, a leading industry expert said.
Such trend is expected to accelerate after Focus Media Holdings Ltd, the country's largest commercial screen-advertising network became the first Chinese company that delisted from the US Nasdaq market and will soon be listed in the domestic A-share market through a reverse merger.
The easier access to capital and loosened administrative restriction for initial public offerings will prompt more companies to float their shares in the Chinese market, said Sun Qiang, chairman of China Venture Capital and Private Equity Association.
"Many US-listed Chinese companies have faced problems including thin trading volume and low valuations. It is natural option for them to return to the home market where they can be better recognized by investors," Sun said.
In the case of Focus Media, the company's valuations has jumped by more than 200 percent to 45.7 billion yuan from 22 billion yuan, the company's valuation before its delisting from the US market.
The home retune of overseas-listed Chinese companies as well as the ample domestic liquidity have prompted major private equities investment firms to increase the proportion of renminbi funds in their overall investment funds.
Zhang Yichen, chairman of CITIC Capital Holdings Ltd, a leading private equity investment firm of China said that the firm will expand its renminbi funds, which currently only account for less than 20 percent of its total funds.
"While the US dollar funds remain a big portion in our investment, the renminbi funds will definitely gain greater share in the future", Zhang said.
CITIC Capital will soon be listed on the National Equities Exchange and Quotations market, the domestic share-transfer platform, to raise funds from smaller institutional investors and rich individual investors.