China Greenlights US Listing of Alibaba- & Tencent-backed ZKH Industrial

The IPO of the industrial products e-commerce platform may bring China listings back to Wall Street after an extended freeze.
Mar. 29, 2022 22:09
China Greenlights US Listing of Alibaba- & Tencent-backed ZKH Industrial

(CapitalWatch, March 29, New York) ZKH Industrial Supply (Shanghai) Co., an online retailer of industrial products backed by Chinese tech giants Tencent and Alibaba, has been greenlighted for a U.S. public offering by Beijing regulators.

China's securities regulator said on Sunday that it does not object to the U.S. listing of ZKH and once again voiced its support for continued overseas listings, as reported by the China Securities Journal. Earlier this month, the China Securities Regulatory Commission (CSRC) said it was working with U.S. regulators on the auditing concerns and expressed a market-friendly stance going forward, ending the massive sell-off of U.S.-listed Chinese stocks.

The green light on ZKH signals another market-friendly move by Beijing. The 2021 regulatory crackdown on overseas listings and the forced delisting of Didi Global (NYSE: DIDI) had many a Chinese company shelve its U.S. plan and pursue a public offering closer to home. But while the ride-hailing giant Didi still faces obstacles with China's cyberspace regulators, Beijing has relayed its focus on stability in the markets over the past few weeks.

Backed by both Tencent (OTC: TCEHY; HKEX: 0700) and Alibaba Group (NYSE: BABA; HKEX: 9988), ZKH operates a one-stop online marketplace for industrial products. It also offers B2B digital tools like inventory forecast optimization.

Operating since 1998 and having restructured into its present business in 2014, the company now counts more than 20,000 manufacturing customers, according to its website. Among its clients and partners it listed a slew of international giants in various industries like Merck (NYSE: MRK), Bosch (OTC: BSWQY), and BASF (OTC: BASFY), to name a few.

According to an earlier Bloomberg report, ZKH Industrial is targeting an IPO of between $300 million to $500 million. It is unclear when ZKH expects to reach U.S. public trading. China Renaissance Holdings and Goldman Sachs were the known banks working on the deal. As of Tuesday, there were no public filings from the company available on the open SEC database.

So far this year, only one Chinese company celebrated its initial public offering in New York, Meihua International Medical Technologies Co. Ltd. (Nasdaq: MHUA). On Tuesday, the small-cap supplier of medical disposables traded 12% higher since its mid-February IPO.