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Due Diligence Specialists Expect China IPOs in US Will Be More Transparent

October 12, 2020 GMT
(PRNewsfoto/I-OnAsia Limited)
(PRNewsfoto/I-OnAsia Limited)

NEW YORK, Oct. 12, 2020 /PRNewswire/ -- Global pre-IPO due diligence specialist I-OnAsia is seeing change in attitudes towards transparency by Chinese executives pursuing IPOs on foreign exchanges.

“I-OnAsia has completed over 17,000 assignments since 2001, including due diligence on Chinese companies going public overseas,” says Mr. Derek Elmer, I-OnAsia’s chairman. “There is a growing appreciation of the relationship between transparency and share price. Due diligence is better understood as building investor confidence, which will be good for future China IPOs overseas.”

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I-OnAsia has grown its China-focused due diligence team in the Americas, hiring Ms. Lingbo Jiang as its new Director of Global Business Development. Lingbo Jiang is a specialist in cross-border business development for the financial sector, focusing on the Chinese IPO market. She is the only Chinese native Designated Market Maker on the NYSE

Lingbo Jiang agrees that overall trend are positive: “A cross-border listing in a foreign market is where trust is at its most delicate, and proper due diligence brings transparency, helping both the listing itself and the liquidity of continued trading thereafter. For as long as Chinese stock markets are not completely open to foreign investors, Chinese companies with international strategies will continue to rely on overseas exchanges to attract foreign investment.”

Lingbo Jiang adds the following insights: “2020 will go down in history as a year of exceptions. One of the bigger surprises during Covid has been how quickly US stock markets have rebounded. It has also been exciting to see how well Chinese companies have performed this year. For example, KE Holdings raised $2.1 billion on the NYSE, making it the largest IPO in the US by a Chinese company since 2018, despite tensions between the US and China being at their highest, Tik Tok and so on.”

The price of poor transparency and corporate governance has been rising. Lingbo Jiang says: “Certain Chinese companies still push the boundaries without abiding by the US financial regulations, which results in either failed or less optimal listings. For example, One of the Chinese IPO’s I recently worked had internal financial issues and had real trouble with its US listing.” And the costs are only likely to increase, says Lingbo Jiang: “The January 2022 deadline for Chinese companies to comply with US audit requirements is just 15 months away.”

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About I-OnAsia

I-OnAsia is a global risk management consultancy working in Due Diligence, Crisis Management, and Corporate Investigations, Litigation Support, Digital Forensics and IP.

Contact: Ms. Lingbo Jiang, Director of Global Business Development. lingbo@ionasia.com.hk

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SOURCE I-OnAsia Limited