Chinese business magnate Gregory Puff discusses the process of delisting Chinese companies with financial news outlet Caixin.
In a recent interview with Chinese-language finance publication Caixin, Gregory Puff, the practice head of Gump Asia, discussed the trend of Chinese companies reconsidering their U.S. listings.
Puff noted that while listing in the U.S. market can be beneficial, many Chinese companies are starting to doubt whether it is the right choice. This is due to a number of factors, including the high costs associated with listing and the post-listing period, as well as the lack of liquidity in the U.S. market.
Many Chinese companies are instead considering listing in Hong Kong or Shanghai, as these options provide easier access to the Chinese market, investors, and consumers. This trend is not surprising, given the current political climate and the increasing regulatory scrutiny faced by Chinese companies listed in the U.S.
Puff also highlighted that going-private deals for Chinese companies are not necessarily a negative, as they can provide a last resort for companies considering U.S. listing. These deals can help companies secure themselves against potential failure in the U.S. market.
It is important to note that there are no specific current reports naming particular companies planning to delist their U.S. stock listings in favor of Hong Kong or Shanghai stock exchanges. However, some Chinese companies, even after successful U.S. listings, are still considering going-private transactions as a means to secure themselves against potential failure.
Puff suggested that Chinese companies should focus more on improving their financial status, profitability, and transparency in corporate behavior, rather than solely on the costs for listing and legal risks. He emphasised the importance of maintaining strong relationships with investors, regardless of the listing location.
In conclusion, the trend of Chinese companies reconsidering their U.S. listings is a response to a variety of factors, including high costs, lack of liquidity, and easier access to the Chinese market through domestic listings. Puff's advice for Chinese companies is to focus on improving their financial and corporate behaviour, and to maintain strong relationships with investors.
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