China supports tech firm US IPO revival, signalling end to freeze

[SHANGHAI] Zhenkunhang Industrial Supermarket Shanghai is considering reviving its US initial public offering (IPO) after China's securities watchdog signalled support for US listings by its homegrown technology firms, according to people familiar with the matter.

The industrial accessories e-commerce site is working with China Renaissance Holdings and Goldman Sachs Group to resume preparations for the listing, the people said, asking not to be identified as the information is private.

A share sale could raise about US$300 million to US$500 million, the people said.

The China Securities Regulatory Commission (CSRC) told banks that it would permit some US listings by companies that meet certain criteria, such as those that don't possess sensitive data, the people said. Zhenkunhang's IPO is not expected to proceed immediately, given the turmoil in markets, they said.

Deliberations are ongoing, details of the plan such as size and timing could change and other banks could be added to the lineup, the people said. Representatives for China Renaissance and Goldman Sachs declined to comment, while CSRC and Zhenkunhang didn't immediately respond to requests for comment.

Reviving the plan would make Tencent Holdings-backed Zhenkunhang one of a handful of Chinese technology firms vying to become the first to list in the US since the debacle surrounding Didi Global's IPO in June that led scores of mainland firms to pause or shift their IPO plans.

A medical device company was the first to break the apparent moratorium on US IPOs by Chinese companies, making its debut in February, and the CSRC has vowed that it will support eligible firms to list abroad.

Zhejiang Geely Holding Group-backed smart car technology company Ecarx, is considering seeking a US listing via a merger with a blank-check company, Bloomberg News reported last week. A handful of Chinese firms have filed for IPOs in recent months, including intelligent parking startup Yi Po International Holdings.

Since Didi, China has unveiled sweeping rules governing overseas offerings to tighten regulation on international debuts. Chinese firms in industries banned from foreign investment will need to seek a waiver from a negative list before proceeding for share sales, and the regulator has proposed that all Chinese companies would be required to pre-register before seeking IPOs and additional share sales abroad. BLOOMBERG