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China’s first initial public offering in New York in seven months lands with a bang as Meihua’s shares jump 29 per cent on trading debut
- Meihua’s strong debut is a breakthrough and other non-medical Chinese firms may still struggle to list in the US, market observer says
- The Jiangsu-based firm too had to downsize its IPO to raise US$36 million from the sale of 3.6 million shares at US$10 each
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Chinese disposable medical devices maker Meihua International Medical Technologies, the first mainland company to list in the United States in the seven months since Beijing’s regulatory crackdown began in July last year, jumped 29 per cent on its trading debut overnight in New York.
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The Jiangsu-based company closed at US$12.92 on the Nasdaq, 29 per cent higher than its offering price of US$10. Its market value stood at US$305 million.
Meihua’s strong debut might suggest foreign investors still had an appetite for initial public offerings (IPO) from Chinese issuers following Didi Chuxing’s controversial US$4.4 billion US listing in June. Beijing announced a cybersecurity investigation into the ride-hailing company just a few days after its IPO.
“Meihua could have a strong debut as it is a medical play, and its business has benefited from the Covid-19 pandemic,” said Tom Chan Pak-lam, chairman of the Hong Kong Institute of Securities Dealers, the industry body of brokers in the city.
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“It is a breakthrough, but other non-medical Chinese companies may still struggle to list in the US. The Chinese companies that want to list there still need to face Beijing’s tough regulatory policies and American regulators’ disclosure requirements,” he said.
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Chinese issuers have stayed away from New York since July, after getting caught between China’s regulatory clampdown and closer scrutiny by the US’s Securities and Exchange Commission, which has put Chinese companies seeking to raise funds on Wall Street under the scanner.
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