- Manycore Tech has planned a Hong Kong IPO to raiseas much as $200 million in partnership with CCB International and JPMorgan.
- After abandoning a US listing following Didi’s troubled debut, Manycore joined other Chinese companies in seeking IPO venues closer to home.
OUR TAKE
Manycore Tech of China, a maker of 3D design software, is preparing for an initial public offering (IPO) in Hong Kong to raise up to $200 million. The Hangzhou-based company, which was originally targeting a US listing in 2021, has shifted its focus to Hong Kong following market uncertainties. The company has chosen CCB International and JPMorgan Chase for the deal, which is still under discussion and details are subject to change. What’s more, Manycore’s decision to list in Hong Kong is significant as it signals a growing trend among Chinese technology companies to seek financial havens in more predictable regulatory environment
—Heidi Luo, BTW reporter
What happened
Manycore Tech is preparing for an initial public offering (IPO) in Hong Kong to raise up to $200 million. The company, which provides a software platform for 3D interior design and construction in China, has selected CCB International Holdings and JPMorgan Chase to manage the IPO process. The move follows an earlier attempt to list in the US in 2021, which Manycore abandoned due to unfavourable market conditions, as evidenced by Didi Global’s troubled debut.
The decision to switch to a Hong Kong listing reflects a strategic shift by Chinese companies towards local markets, driven by increased regulatory scrutiny and global economic uncertainties. This shift has been further influenced by Beijing’s increased oversight of overseas share sales, including a mandate for national security reviews before companies list abroad, according to Bloomberg.
In addition, the financial losses suffered by investors following the New York IPO of Didi Global has led US regulators to demand more detailed disclosures from companies with significant ties to China, which compound the challenges these companies face in international markets.
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Why it’s important
Founded in 2011 and based in Hangzhou, China, Manycore Tech is known for its Kujiale design software, which serves the domestic Chinese market, while its international counterpart, Coohom, caters to global users.
Despite its innovative offerings, Manycore reported a loss in 2020, according to its US IPO documents. Meanwhile, the company’s move to list in Hong Kong is part of a wider trend seen this year, with new listings in the city raising $2.26 billion, down 14% year-on-year and a significant drop from 2021 figures. This decline in IPO activity comes despite Chinese regulators encouraging industry leaders to list in Hong Kong.
Details of the timing and size of the IPO are still under discussion. Manycore’s move to a Hong Kong listing is seen as part of a wider trend of Chinese companies increasingly seeking financial activities within Asia due to tighter regulations and growing geopolitical tensions.
