Hong Kong's head of listings Bonnie Chan pointed to another blockbuster year, saying that the world's favourite market for IPOs in eight of the past 12 years "will be as busy, if not more busy this year" than in 2020, based on the pipeline of companies queuing up to float their shares in the city during a March interview with Bloomberg.
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ByteDance and Didi regularly feature in lists of the planet's most valuable companies still in private hands. A record 143 mainland Chinese companies completed an IPO in the first three months of this year, according to Refinitiv, amassing US$23.6 billion of financial firepower to grow organically or via acquisitions. The next highest volume for the first quarter was US$17.4 billion in 2010.
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China's booming consumer market is good fodder for unicorns that specialise in business model innovation, typically improving user experience rather than a leap forward in technology. However, as Beijing spends more on research and development to boost the country's self-sufficiency and challenge the US's hi-tech supremacy, start-ups in the fields of artificial intelligence, hardware and biotechnology are multiplying.
Shanghai's Star Market for hi-tech companies is the up-and-coming destination for fast-growing Chinese companies, such as WM Motors and Megvii. It welcomes unprofitable companies, red chips and companies with weighted voting rights.
Here are the top 10 largest Chinese technology companies likely to launch an IPO this year.
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No. 10 Huohua Siwei
The online education platform for children aged 3 to 12 years is seeking an IPO in the US, according to a person familiar with the matter. Known as Spark Education in English, the Beijing-headquartered company specialises in mathematics, science and language courses.
Huohua Siwei earns 200 million yuan (US$30.5 million) from monthly fees paid by 250,000 students, Lou said in September. It employs over 4,200 teachers and roughly 1,000 R&D staff.
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No. 9 We Doctor
We Doctor is seeking to raise over US$1 billion in Hong Kong, according to a person familiar with the matter.
Hello TransTech, a survivor of China's bike-sharing bubble. Photo: Facebook alt=Hello TransTech, a survivor of China's bike-sharing bubble. Photo: Facebook>
No. 8Hello TransTech
The bicycle-sharing platform is preparing for a US IPO, according to a person familiar with the matter.
The Shanghai-headquartered firm backed by Ant Group has raised US$2.2 billion in equity over 13 rounds since it was founded in 2016, and was valued at US$5 billion post-money during its Series G funding round in 2018.
Hello TransTech is led by Yang Lei and Li Kaizu and competes against Didi and Meituan in bike-sharing. It said in October it would also compete with Didi head-on in taxi-hailing.
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No. 7 WM Motor Technology
The company, which designs, manufactures and sells affordable battery-run EVs under the Weltmeister brand, recruited mainland brokerage China Securities to prepare for the IPO on September 30.
Unlike its peers NIO and Xpeng, which chose to list in the US, Shanghai-headquartered WM Motor was always likely to plumb for a local listing, given it has received considerable hometown government support. WM Motor has raised a total of US$5.5 billion across five rounds, backed by Tencent and Sequoia. The Shanghai-based company was valued at about US$5 billion post-money during its Series C round in 2019.
Founded in 2015 by former Geely and Volvo executive Freeman Shen Hui, WM Motor has an assembly in the Zhejiang manufacturing hub of Wenzhou, with another facility under construction in Huanggang of Hubei province.
Megvii, at the cutting edge of facial-recognition technology. Photo: Simon Song alt=Megvii, at the cutting edge of facial-recognition technology. Photo: Simon Song>
No. 6 Megvii Technology
Founded by three Tsinghua University graduates in 2011, the Cayman Islands-registered company is issuing 253 million Class B shares, or not less than 10 per cent of its enlarged capital.
Megvii attempted to list in Hong Kong in August 2019 but let its application lapse in February 2020 after the Trump administration included it in an October 2019 trade blacklist.
Megvii was last valued at more than US$4 billion post-money after raising US$750 million in 2019.
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No. 5 Syngenta Group
The Swiss agrichemicals giant is on track for an IPO by mid 2022 in Shanghai, according to people familiar with the matter.
Why is Syngenta included among technology companies? The Basel-based company is at the cutting edge of biotechnology, developing the first genetically modified cereal for human consumption, and it fully sequenced the DNA of the rice genome in 2001.
Investors will mull over the ramifications of the Pentagon adding ChemChina to a blacklist of companies in August that it said have connections to the Chinese military.
Workers sort out packages for delivery at JD's Yizhuang Smart Delivery Station in Beijing, China, on November 11, 2020, aka Singles' Day shopping festival. Photo: Simon Song alt=Workers sort out packages for delivery at JD's Yizhuang Smart Delivery Station in Beijing, China, on November 11, 2020, aka Singles' Day shopping festival. Photo: Simon Song>
No. 4 JD Logistics
A man stands near a giant sign of Chinese company ByteDance's app TikTok, known locally as Douyin, during China Fashion Week, in Beijing, China March 31, 2021. Photo: Reuters alt=A man stands near a giant sign of Chinese company ByteDance's app TikTok, known locally as Douyin, during China Fashion Week, in Beijing, China March 31, 2021. Photo: Reuters >
No. 3 Douyin
ByteDance could pick New York or Hong Kong to list Douyin. The possibility of a US listing has gained traction since Joe Biden was elected US president, according to the source. ByteDance could follow a US listing with a secondary listing in Hong Kong.
The unicorn, which has filed confidentially to list on NYSE according to a Bloomberg report, is leaning towards New York as its primary listing venue, with Hong Kong as a backup, according to people familiar with the matter. Two listings would allow Didi to tap both pools of capital. No final decision has been made as to when and where to IPO, the people added.
At least some of its 32 investors will be itching to exit after Didi's 19 rounds of fundraising, the highest number of rounds among unicorns on this list. The Beijing-headquartered company has raised US$19.2 billion of capital in private markets since it was founded in 2012. Didi counts SoftBank, Tencent and Alibaba among shareholders, as well as Toyota Motor, Uber and Booking Holdings.
When Didi does list, it will be sure to turn heads with its size. In a 2019 fundraising the company's post-money valuation hit US$62 billion, up from US$56 billion in 2018.
Didi's core ride-hailing business was profitable, an executive said in May, so the time may be ripe to make the leap and finally float.
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No. 1 ByteDance
Another option for Beijing-based ByteDance is to list the whole group, instead of just Douyin.
ByteDance is the world's first and only hectocorn, a privately held start-up valued at over US$100 billion. ByteDance was valued at about US$140 billion post-money during its 2020 fundraising when Tiger Global Management backed the firm. It was founded in 2012 and counts some of the world's biggest venture capital funds as investors, including SoftBank, General Atlantic and Sequoia. ByteDance has amassed about US$4.4 billion across 11 fundraising rounds.
ByteDance's 2020 revenue reached US$37 billion, four times larger than smaller rival Kuaishou, The Information reported in January
