After two years of crackdown and sanctions, China appears ready to unlock the potential of the private sector through tech IPO growth.
alibaba group holding and JD.com are Allegedly Involved in development that could revive long-dormant technology IPO landscape in China. Both the tech giants are planning to issue initial public offerings in the East Asian nation. These developments, along with three expected 2023 monumental Chinese debuts, could prop up the country’s growing tech industry and reopen Hong Kong’s stock market.
Alibaba’s logistics arm, Cainiao Network Technology, recently began talks with banks regarding a public offering. In addition, two JD subsidiaries also recently filed for share sales for the first time on Thursday. According to inside sources, the three expected listings could generate around $5 billion, or 6.6 Singapore dollars.
The development of the China tech IPO has raised hopes that the leading Asian economy is looking to unlock the potential of its private sector. In addition, Chinese tech IPO revival also ends post-suspension drought ant group Record IPO last year. Additionally, the welcome development marks a full-circle moment for Beijing after cracking down on internet tech giants in 2021. The crackdown included tighter regulatory restrictions on companies like Alibaba and the like. Tencentas well as stricter requirements for overseas listings.
Analyst Comments on China Tech IPO Developments
Discussing China’s openness to drive tech public listings this year, Bloomberg Intelligence analyst Katherine said:
“[This]indicates Beijing’s support for more spirited capital market activities within China’s tech sector. This should help lift overall market sentiment and anticipation for listings of other giant companies within the sector.”
Several Chinese tech companies resubmitted listing applications for Hong Kong last week. These include logistics giant Lalatech Holdings, fitness app Keep as well as social media app Soulgate. Furthermore, more prominent local tech players may follow suit sooner rather than later. Notable among these more significant tech IPO candidates are ride-hailing giant Didi Global, TikTok parent ByteDance, and social media platform Xiaohongshu.
The Chinese government seeks to strike a delicate balance between potentially unlocking billions of dollars in value and reducing technological impact to ‘safe’ levels. However, looking back at the past, many entrepreneurs and business executives are wary of the government’s intentions. While there is a lot to look forward to, there is no guarantee that an IPO move can boost the business in the long run.
Regardless, Chinese firms have outperformed their American and European counterparts on equity financing so far this year. The performance is driven by expectations that the country’s post-Covid reopening is still in its peak. In contrast, the rest of the world is grappling with a recession.
Alibaba announces restructuring plans amid IPO development
Alibaba’s IPO plan comes amid return of co-founder jack ma for the recent business restructuring of China and the company Announcement, Earlier in the week, Alibaba announced its intention to split into six business groups, each capable of creating its own public listing. According to the Hangzhou-based company, the move will allow for faster and more streamlined capacity. In addition, each business unit, including the Cloud Intelligence Group and the Digital Media & Entertainment Group, will have its own strategic priority. Each organization will also have its own dedicated chief executive officer and board of directors.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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