By Luanne Teoh on 06-16-2011

Luanne Teoh

June 16, 2011

In 2010, a total of 41 Chinese companies went public in the U.S. via Initial Public Offering (IPO) on the New York Stock Exchange. More than half (22) of these IPOs took place in the fourth quarter. A complete list of the companies can be seen in this 2010 Summary of Chinese IPOs in the U.S

Sequoia Capital had 13 IPOs last year out of which 9 of them were Chinese companies. Internet based Chinese IPOs in the U.S. have also been the best performers in the stock markets including:

• Youku
• ChinaCache
• DangDang
• HiSoft
• Camelot Information Systems
• And many others

While many Chinese internet based companies are seen as copycats of more globally known American ones, their popularity and strong reputation in the U.S stocks and financial circles remain unrivaled. According to Triad Securities in its 2010 IPO market review, “40% of U.S. deal flow in the fourth quarter 2010 was attributed to these Chinese *ADRs”.

The predictions for Chinese companies listings in the U.S for 2011 is even rosier. According to He Zhaofeng, a senior partner in Ernst & Young, the firm is currently preparing for 20 companies to list in the U.S. this year. He also mentioned that approximately 60 companies will be listed in U.S., a 50% increase from last year.

The main drivers for this surge are investor’s confidence in the Chinese economy — which have seen GDP growth year on year since 2005. China is also forecasted for 9.4% GDP growth in 2011, much higher than the U.S. Also, China’s rapidly growing middle class is leading its transformation from an production and export led economy to one that is more driven by domestic consumption. According to CommonWealth Magazine, “30 years of economic liberalization have pulled 600 million people out of poverty and turned them into the world’s biggest middle-class consumer group” ever in history.

*American Depository Receipt (ADR) is a stock that trades in the United States but represents a specified number of shares in a foreign corporation. ADRs are bought and sold on American markets just like regular stocks, and are issued/sponsored in the U.S. by a bank or brokerage.

About Luanne Teoh

Luanne is a senior correspondent for BizTechDay focused on Small Business Tech, Mobile and China based in San Francisco. In the last 17 years, she has helped launch start-ups and turned around failing operations. Her international work experience include both public and private corporations in Southeast Asia, Australia and North America. She has previously worked for Oracle Corporation, SonyBMG Music, Universal Music, Catcha Media and SOH Inc. Apart from a keen interest in technology, Luanne is also and avid explorer of the globe, cultures and people.

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