Hesai Raises $190 Million in Biggest Chinese U.S. IPO Since 2021

Hesai Group (HSAI), the self-driving car technology company, raised $190 million in a U.S. initial public offering (IPO), the largest by a Chinese company since 2021, in a sign that economic ties between the two nations are on the mend even amid simmering political tension.

In its Nasdaq debut, Hesai sold 10 million American depositary receipts (ADRs) for $19 each. The last time a Chinese company had a larger IPO was ride-sharing service Didi Global Inc. in 2021. Didi raised over $4 billion before a data security scandal tanked its stock days later, eventually leading to probes by U.S. and Chinese authorities, and the stock being delisted in the U.S. in May 2022.

Last year was slow for U.S. IPOs generally and Chinese companies in particular, as the Asian nation's strict COVID policies, high inflation, and hesitation after the Didi crash diminished incentives to list. Both China and the U.S. instituted rules regarding data security and other concerns for Chinese companies hoping to trade on American exchanges.

Trade Increases, Tensions Linger

The environment for Chinese IPOs is slowly improving. China eased its pandemic restrictions at the end of last year, and Nasdaq Vice Chairman Bob McCooey has said there's a strong pipeline of Chinese companies seeking to list on the exchange in the coming months.

At the same time, U.S.-China trade is increasing to levels not seen since before the pandemic. The U.S. imported about $537 billion in Chinese goods in 2022, 6.3% more than in 2021 and just shy of the record set in 2018. U.S. exports to China also climbed in 2022, though at a slower rate.

Trade is strengthening while political turmoil between the two nations remains high after former President Donald Trump imposed sweeping tariffs on Chinese goods. President Biden's administration has kept many of those tariffs in place. The Chinese surveillance balloon that the U.S. spotted and destroyed last week has fed further tension.