Jumei leads new wave of US-listed privatizations

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Jumei International, China’s fashion and lifestyle e-commerce platform, has delisted from the New York Stock Exchange following the completion of its privatization.

This is the first Chinese company delisted from the US markets this year. The lawyer who handled this deal says for some Chinese companies listed in the US, it may make more sense to be closer to the home market.

Jumei
Stephanie Tang

“I think from the investors’ perspective, the A-share market would be perceived as more attractive, in terms of investment or return of investment, etc., if they can get into the playing field of A-shares,” Stephanie Tang, head of private equity in Greater China at Hogan Lovells, told China Business Law Journal.

Tang said that most Chinese companies listed in the US are China businesses, with only a handful of big ones having international operations. Given China’s strong internal sufficiency capability during the pandemic, “close to the home market” is the mindset that many PRC investors have at the moment.

Apart from the trade war and pandemic, the scandal of Luckin coffee having faked its sales figures is another factor that has triggered the departure of Chinese companies from the US stock market, followed by US securities regulators’ warning to investors over Chinese company disclosures a few weeks later.

“Many Chinese companies listed in the US are suffering, from a public image perspective, because of Luckin,” said Tang. “It is hard to tell how long this negative impact on Chinese companies will last.”

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