China Transactions Insights - Early Winter 2022
China’s economy has shown sound momentum through the first three quarters of 2022 despite downward pressures brought by the complex global environment and domestic COVID-19 resurgences, as demonstrated by a 3% increase in GDP during this period. The economy also recorded increases in fixed asset investment (5.9%), value-added industrial output (3.9%) and foreign trade (9.9%) for the first three quarters of 2022.1 Continued scrutiny of offshore-listed Chinese companies and broader market turbulence have continued to weigh on the stock prices of many Chinese firms traded on U.S. exchanges.
U.S. IPO activity for Chinese companies slowed in 2022 amid regulatory uncertainty for Chinese companies pursuing offshore listings, compounded by choppy market conditions.2
Going-private transaction activity for U.S.-listed companies based in China has continued at a steady pace, with six privatizations completed during the year through October and six potential transactions announced that have yet to close. U.S.-listed Chinese companies with pending going-private proposals represented about USD 2.5 billion in total market capitalization as of October 31, 2022.2
Sources:
1 China National Bureau of Statistics and China Ministry of Commerce
2 SEC filings, company press releases and S&P Global Market Intelligence as of October31, 2022