Investors are getting plenty of chances this month to tap one of the best-performing segments of the year’s initial public offerings: Asia-based companies listing in the U.S.
Fifteen Asian companies have raised $3.2 billion in U.S.-listed IPOs and seen their shares climb 46 percent since their listings this year, according to weighted-average share price data compiled by Bloomberg. That compares to an 11 percent climb for the 105 U.S. businesses that listed domestically and raised a combined $23.6 billion.
There’s more on the way. Some of Asia’s biggest private companies priced U.S. IPOs this week, driving October’s trans-Pacific share sales to a level not seen since Alibaba Group Holdings Inc.’s record $25 billion IPO in September 2014.
In this year’s fourth-biggest U.S. IPO, Chinese online lender Qudian Inc. raised $900 million Tuesday. Its shares are up 38 percent since its debut, giving the company a market value of $10.9 billion.
Two more Asia-based companies with U.S. trading debuts on Friday helped boost the tally.
Sea Ltd., the owner of the Garena gaming platform, raised $884 million, increasing the size of the offering to 59 million shares from 49.7 million and pricing the stock $1 above the marketed range at $15. Shares of southeast Asia’s most valuable startup rose as much as 13 percent and were up 2.5 percent to $15.38 at 12:50 p.m. in New York.
China’s Rise Education Cayman Ltd. raised $160 million after pricing its shares at $14.50. The stock climbed 19 percent at 12:50 p.m. in its debut to $17.26, valuing the English-language schooling company at $948 million.
Combined with other listings, those three have put October on track to be the biggest month of the year for U.S. IPOs. The $29 billion raised in 2017 has already outpaced the $15.2 billion in stock offered by new U.S.-listed companies through this time last year, according to data compiled by Bloomberg. That excludes special purpose acquisition companies, funds and real estate investment trusts.
Qudian Chief Financial Officer Carl Yeung said the visibility and the size of the investor ecosystem that comes with a U.S. listing were deciding factors for picking the venue.
“We believe we will get good liquidity, as well as people who can appreciate what a tech company can achieve in the U.S. markets,” he said in an interview. “As a high-profile company in the market, we can attract the best talent in the world.”
Still, not all of the Asian companies’ shares have scored big returns. Last year’s crop is up and average of only 12 percent, bogged down by the underwhelming performance of the biggest IPO of 2016: ZTO Express Inc. The Chinese delivery service that gets most of its business from Alibaba is down 21 percent after raising $1.4 billion last October.
The two previous years may give investors more cause for optimism. The 13 Asian companies that raised a combined $1 billion in 2015 are up 117 percent, beating the 19 percent rise for U.S.-based companies that had domestic listings that year. In 2014, 20 Asian companies including Alibaba raised a combined $30 billion. Those stocks are up 152 percent on average. The $50 billion in U.S.-based companies’ shares sold that year have climbed only 35 percent.
For the most recent listings, investors’ appetites have been whet by the companies’ future potential in their respective industries, said Bruce Wu, co-head of Citigroup Inc.’s Greater China equity capital markets group and vice chairman of Japan capital markets origination.
“Growth is definitely the main theme underlying the most recent wave of transactions,” Wu said. “These companies are enjoying a relatively issuer-friendly market environment.”