Southeast Asian Companies Look to U.S. Listings amidst Chinese IPO Slowdown
Several Southeast Asian companies are considering listing in the United States as Chinese stock offerings face a slowdown. Funding Societies, Gushcloud International, and Sunday, leading SME digital financing platform, entertainment firm, and insurance technology firm respectively, have expressed their interest in an initial public offering (IPO) in New York. Vietnamese internet company VNG Corp and Philippine real estate company DoubleDragon Corp’s Hotel101 Global have also recently announced their plans to list in the U.S.
This move comes as Chinese companies have put a pause on U.S. IPOs due to political tensions with Washington, tightened scrutiny from Beijing on domestic firms seeking overseas listings, and China’s own slowing economy. Chinese competitors have been pushed to the sidelines, enabling some of their ASEAN rivals to step into the spotlight, according to Leif Schneider, senior legal adviser at law firm DFDL Vietnam.
Southeast Asian companies have so far raised about $101 million through IPOs in the U.S. this year, significantly lower than last year’s $919 million. However, bankers expect the pace to pick up in the next 12 months as companies seek new sources of capital after relying on private funds in recent years. In contrast, Chinese firms have raised $463.7 million through U.S. listings this year, a fraction of the amounts raised in 2020 and 2021.
For investors looking for exposure to emerging markets, Southeast Asia offers strong economic growth and an increasing population. Indonesia, the region’s biggest economy, showed accelerated growth in the latest April-June period, driven by robust household and government spending.
Southeast Asian firms seeking U.S. listings aim to raise between $300 million and $1 billion, with valuations ranging from $1.5 billion to $8 billion. These plans are expected to benefit Wall Street banks in Asia, as they generate about a third of their revenues from equity capital market deals.
Funding Societies’ CEO Kelvin Teo emphasized the appeal of a U.S. listing, citing the deep pool of capital and global investor base it offers. Gushcloud’s CFO Andrew Lim also highlighted the exposure to investors familiar with fast-growing new economy companies that a U.S. listing would provide.
Deloitte Southeast Asia Disruptive Events Advisory Leader Tay Hwee Ling stated that companies in sectors such as logistics, technology, mining, electric vehicles, and renewable energy are most likely to pursue IPOs both locally and abroad. International investors recognize the value of portfolio diversification that Southeast Asia provides.
However, the expected increase in Southeast Asian listings could face challenges from share volatility and stringent investor scrutiny. While most U.S. investors are proficient in evaluating opportunities across different sectors, it is helpful for Southeast Asian companies to educate investors on country-specific factors that could affect their business.
The plans of Southeast Asian firms to list in the U.S. demonstrate the region’s appeal as an emerging market with significant growth potential. As Chinese IPOs face obstacles, companies from Thailand, Singapore, Malaysia, and Vietnam are turning to U.S. listings to attract capital and expand their global footprint.
