LinkDoc turns into first Chinese language agency to shelve U.S. IPO after Beijing’s crackdown

The Nasdaq emblem is displayed on the Nasdaq Market web site in New York September 2, 2015. REUTERS/Brendan McDermid/File Picture

HONG KONG, July 8 (Reuters) – Chinese language medical information group LinkDoc Expertise Ltd (LDOC.O) has shelved plans for an IPO in the US because of Beijing’s clampdown on abroad listings by home companies, based on three sources with direct data of the matter.

It’s the first Chinese language agency identified to have pulled again from IPO plans since China’s cybersecurity regulator toughened its strategy to oversight final week with an investigation into ride-hailing large Didi International Inc (DIDI.N) simply two days after its New York debut. That was quickly adopted with an order for Didi’s app be faraway from app shops.

Beijing additionally stated on Tuesday it will strengthen supervision of all Chinese language companies listed offshore, a sweeping regulatory shift that triggered a sell-off in U.S.-listed Chinese language shares. learn extra

LinkDoc’s resolution to droop its $211 million IPO, first reported by Reuters, is more likely to be adopted by others, analysts stated, though they famous that U.S. listings weren’t barred per se. learn extra

“For firms making use of for a U.S. itemizing, they could have to attend for additional clarification, stricter scrutiny and pre-approval from completely different regulators and authorities,” stated Bruce Pang, macro & technique analysis head at China Renaissance Securities.

“The brand new guidelines might impose lengthy ready intervals on any firms hoping to listing overseas which is able to hit investor sentiment, depress valuations for IPOs within the U.S. and make it tougher to boost funds abroad,” he stated.

Backed by Alibaba Well being Data Expertise Ltd (0241.HK), LinkDoc filed for its IPO final month and was because of value its shares after the U.S. market shut on Thursday.

It had deliberate to promote 10.8 million shares between $17.50 and $19.50 every. The e-book closed at some point sooner than deliberate on Wednesday, one of many three sources and a separate individual stated.

The sources declined to be recognized as the data has not but been made public.

LinkDoc didn’t instantly reply to a request for remark.

Morgan Stanley, Financial institution of America, and China Worldwide Capital Corp Ltd (CICC) have been the funding banks on the deal. The three banks didn’t reply to a Reuters request for remark.

DEALS IN DANGER

U.S. capital markets have been a profitable supply of funding for Chinese language companies up to now decade, particularly for expertise firms trying to benchmark their valuations in opposition to listed friends there and faucet an considerable liquidity pool.

To date this 12 months, a report $12.5 billion by Chinese language companies has been raised from 34 U.S. listings, Refinitiv information exhibits, effectively up from the $1.9 billion from 14 offers in the identical interval a 12 months in the past.

Eight Chinese language firms together with dwelling service platform Daojia Ltd and Atour Life-style Holdings have made public filings with the Securities and Alternate Fee (SEC) to listing within the U.S. later this 12 months, a evaluation of the filings confirmed.

The more durable stance by the Cybersecurity Administration of China has been pushed partly by considerations that the US might achieve larger entry to information owned by Chinese language companies – just like considerations that the earlier Trump administration had voiced about Chinese language companies working in the US.

In Might, Reuters reported that Beijing was urgent audio platform Ximalaya to drop U.S. itemizing plans and go for Hong Kong as an alternative, with one supply on the time citing Beijing’s considerations that U.S. regulators will doubtlessly achieve extra entry to audit paperwork of New York-listed Chinese language firms. learn extra

Analysts additionally notice the more durable stance coincides with new U.S. rules being rolled out that might see Chinese language firms delisted if they don’t adjust to U.S. auditing guidelines.

Reporting by Scott Murdoch and Kane Wu; Enhancing by Sumeet Chatterjee and Edwina Gibbs

Our Requirements: The Thomson Reuters Belief Ideas.

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