Robotaxi firm WeRide went public on the Nasdaq on Oct. 25. (Photo Illustration by Pavlo Gonchar/SOPA … [+]
Listings by Chinese businesses at the Nasdaq in 2024 have already surpassed last year’s total, buoyed by investor optimism that also has fueled gains in U.S. companies, Nasdaq Vice Chairman Bob McCooey said on Tuesday at a forum organized by the China Institute in New York.
Some 42 Chinese companies have listed on the Nasdaq this year, not including eight SPAC combinations by businesses from the country; that total exceeds the 28 new listings and seven SPAC deals from China last year, said McCooey, who is also Nasdaq’s global head of capital markets.
“U.S. companies had to lead,” he said, looking back over a year in which the Nasdaq Composite Index has soared 40% so far. “Now Chinese companies are coming back,” McCooey said. “Our pipeline continues to be very, very strong.”
Underpinning the trend is the large number of successful private sector business in China, the world’s No. 2 economy. The country, whose GDP growth this year is projected by the IMF to top 4%, ranked No. 2 in the number of members on the 2024 Forbes Billionaires List.
“China is one of the great entrepreneurial countries of the world,” McCooey said. “Sometimes we in the U.S. wrap ourselves in the idea that entrepreneurs only exist in Silicon Valley and Cambridge, Massachusetts. There are amazing entrepreneurs in China.”
Among Nasdaq-traded companies led by Chinese entrepreneurs, McCooey citied e-commerce giant Pinduoduo, which went public there in 2018 and today boasts a market cap of $158 billion. Its largest shareholder Colin Huang ranks No. 41 on the Forbes Real-Time Billionaires List today with a fortune of $40 billion.
New Chinese listings at the Nasdaq this year include WeRide, Inc., a provider of autonomous vehicle technologies, BingEx, a courier services provider, and Super Hi, an international business arm of the Haidilao restaurant chain that is also traded at the Hong Kong Stock Exchange. Among China-backed SPAC deals at the Nasdaq this year is Lotus Technology, controlled by Chinese billionaire Li Shufu. Currently, more than 250 Chinese companies trade at the Nasdaq, McCooey said.
IPOs from the country nevertheless continue to face headwinds from tightened Beijing rules on IPOs unveiled in March last year, McCooey said. Listings would have more room to increase “if China could allow some of these companies to list more quickly,” he said.
Though the value of new listings at the Nasdaq this year is below peak years, their healthy total number indicates that market interest this year has been “quietly very positive.”
“Investors pulled back on being exposed to China especially in an election year,” McCooey said. “I think quietly a lot of investors (from) earlier years have started to re-invest in China.”
“It’s the second-largest economy in the world and it’s got massive companies that we fully expect to grow,” he said.
Coming out of the crash of 1987, U.S. investors were encouraged to have a diversified portfolio of stocks, McCooey recalled. Today, “those equities can’t just be U.S. equities,” he said. “You need to have a diversified portfolio.”
“You need to have exposure to China if you’re going to be a long-term investor who’s going to have a good portfolio at the end of the day,” he said.
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