Chinese tech companies are speeding up efforts to raise funds offshore, benefiting from improved investor sentiment and hopes of support from Beijing for private firms, according to bankers. In a recent upswing in offshore equity sales, two tech companies collected a total of $500 million this week, with more firms gearing up for similar moves in the near future. This recovery marks a shift from sluggish fundraising in recent years due to economic challenges and regulatory actions, allowing Chinese companies essential access to growth capital.
Notable transactions include iQIYI securing $350 million in a convertible bond, and Black Sesame raising $160 million through a private share placement. These developments follow a meeting between President Xi Jinping and tech industry leaders, suggesting a potential policy change towards internet giants. Li He from law firm Davis Polk anticipates a surge in IPOs, particularly in tech, healthcare, and consumer sectors, buoyed by Xi's engagements and the success of AI startup DeepSeek.
Further indications of market revival include an increase in new listing applications in Hong Kong, with Chinese companies raising $3.3 billion in offshore capital markets this year, a substantial rise from the previous year. The momentum is supported by a robust market rally, including a notable 12.55% surge in the main Hong Kong index. Mandy Zhu, UBS Asia's vice-chair of global banking, projects a rise in fundraising activities and IPO activity in the near future.
Among the companies eyeing offshore listings are CATL, Anjoy Foods, and WeDoctor, reflecting growing global investor interest in Chinese tech sectors. The rise of DeepSeek is attracting venture capital interest in AI applications, with Chinese investors and tech firms expressing keen interest. Despite concerns over Sino-U.S. tensions and increased regulatory scrutiny impacting dollar venture funds, industry analysts foresee a continued growth trajectory for Chinese investments.