Chinese medical data group LinkDoc Technology has shelved plans for an IPO in the United States due to Beijing’s clampdown on overseas listings by domestic firms, according to sources with direct knowledge of the matter.
It is the first Chinese firm known to have pulled back from IPO plans since China’s cybersecurity regulator toughened its approach to oversight last week with an investigation into ride-hailing giant Didi just two days after its New York debut. That was soon followed with an order for Didi’s app be removed from app stores.
Beijing also stated on Tuesday, July 6, it would strengthen supervision of all Chinese firms listed offshore, a sweeping regulatory shift that triggered a sell-off in US-listed Chinese stocks.
LinkDoc’s decision to suspend its US$211 million IPO, first reported by Reuters, is likely to be followed by others, analysts said, although they noted that US listings were not barred per se.
“For companies applying for a US listing, they may have to wait for further clarification, stricter scrutiny and pre-approval from different regulators and authorities,” said Bruce Pang, macro & strategy research head at China Renaissance Securities.
“The new rules may impose long waiting periods on any companies hoping to list abroad which will hit investor sentiment, depress valuations for IPOs in the US and make it more difficult to raise funds overseas,” he said.
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