Chinese self-driving company, WeRide, was listed on the Nasdaq on October 25, 2024. This event, along with several other high-profile listings outside mainland China, has sparked renewed optimism among investors for potential profitable exits. Despite increased scrutiny from regulators on listings of Chinese companies in the U.S. and Hong Kong following the Didi IPO in 2021, analysts forecast a rise in Chinese IPOs in the coming year.

WeRide’s shares rose nearly 6.8% on their Nasdaq debut. Earlier in the month, Chinese robotaxi operator Pony.ai also submitted documents for a Nasdaq listing. Both companies have long intended to go public.

The process for Chinese companies to go public in New York has been clarified by U.S. and Chinese authorities. However, geopolitical tensions and market shifts have significantly reduced U.S. IPOs from Chinese businesses.

Marcia Ellis, Hong Kong-based global co-chair of private equity practice at Morrison Foerster, anticipates the IPO market to rebound in 2025, driven by interest rate decreases and the U.S. presidential election conclusion. She also noted that many regulatory issues between the U.S and China, which had previously deterred Chinese companies from listing abroad, have been resolved.

This year, 42 companies have gone public on the Hong Kong Stock Exchange, and 96 IPO applications were either pending listing or under processing as of September 30. Horizon Robotics, a Chinese AI and auto chip developer, and state-owned CR Beverage, both went public in Hong Kong last week. They were the exchange’s largest IPOs of the year, according to Renaissance Capital.

Reuben Lai, vice president of private capital, Greater China at Preqin, suggests that Chinese companies often view a Hong Kong listing as an indicator of investor interest for an IPO in another country. Ellis agrees but adds that the depth of U.S capital markets still make New York a serious consideration for companies, especially those focused on advanced technology.

Chinese electric car company Zeekr and Chinese-owned Amer Sports both listed in the U.S. earlier this year. Chinese electric truck manufacturer Windrose also intends to list in the U.S in the first half of 2025.

The anticipated recovery in Chinese IPOs in the U.S. and Hong Kong could help funds exit from their early-stage investments in startups. This resurgence of investor activity, while not as robust as in the past two years, includes investments in consumer products such as milk tea and supermarkets, according to Lai.