Core Viewpoint - The new financial thresholds and stricter substantive reviews imposed by Nasdaq and NYSE are expected to make 2026 a pivotal year for Chinese companies seeking to list in the U.S. The OTC market is emerging as a more flexible alternative for these companies to navigate the challenges of going public abroad [1]. Nasdaq Regulations - Nasdaq has implemented discretionary powers allowing it to reject listings even if companies meet all written requirements if there are risks of securities manipulation [2]. - The minimum public float market capitalization requirement under the net income standard has been raised from $5 million to $15 million [2]. - A new delisting rule states that stocks priced below $0.10 for ten consecutive days will be immediately suspended and initiated for delisting without a grace period [2]. - Special requirements for Chinese companies may include a minimum fundraising of $25 million through IPO or reverse mergers, potentially prohibiting direct listings [2]. NYSE Regulations - NYSE maintains its existing standards while the NYSE American market awaits approval for its new standards [3]. Financial Standards - The fundraising and market capitalization thresholds have been raised to $15 million [4]. Stock Price Standards - The minimum stock price standard has been unified to $4 per share, and the calculation of public shares has been revised to exclude restricted stocks [5]. Market Dynamics - In 2025, only 1 out of 93 Chinese companies listed on U.S. main boards met the new regulations through direct IPO, with nearly 70% of small enterprises raising less than $1 million, contrasting sharply with the $25 million threshold for main boards [5]. - The OTC market, with over 12,000 listed companies and annual trading volumes in the hundreds of billions, is being recognized as a viable capital market ecosystem rather than a secondary option [5]. Advantages of OTC Market - The OTC market offers excellent cost-effectiveness with a listing cycle of only 3-6 months and no mandatory underwriters, significantly reducing compliance uncertainty [5]. - It accommodates various stages of enterprise development, with market makers providing broad coverage and supporting ADR listings to meet diverse financing needs [6]. - The transition to main boards is facilitated, with an average of 52 companies per year moving from OTC to main boards between 2018 and 2022, and a recent case of a Chinese company transitioning in just 6-8 weeks [8]. - The flexible equity structure allows founders to maintain a high level of control [9]. Strategic Considerations for Chinese Companies - Startups should initially consider the OTC ID/Pink Sheets market, while growth-stage tech companies should target OTCQB, and mature companies should aim for OTCQX [10]. - Companies are advised to standardize financial statements according to U.S. GAAP/IFRS and enhance information disclosure to meet dual regulatory requirements [10]. - OTC can serve as a "compliance training ground" to prepare for transitioning to main boards by meeting net asset, shareholder, and market capitalization requirements [10]. - The evolving U.S. market landscape is complemented by improved regulatory processes from the China Securities Regulatory Commission and optimized foreign exchange policies, facilitating the repatriation of funds raised abroad [10].

Core Insights - The "2025 China Enterprises Going Global Summit" was held in Shenzhen, focusing on creating a high-end platform for Chinese companies to address challenges in international expansion and explore collaborative transformation paths [1] Group 1: Trends in Chinese Companies Going Public - Chinese companies are currently in a recovery phase regarding listings in the U.S., facing challenges in attracting long-term international capital, particularly from Europe and the U.S. [3] - There is a positive trend observed where international funds are returning to Chinese assets, influenced by both internal and external factors [3] - Internal factors include the Chinese government's increased focus on economic challenges and the introduction of supportive policies since September 24 of the previous year [3] - The emergence of new Chinese production capabilities has led to a re-evaluation of the value of Chinese tech stocks [3] - External factors involve changes in global asset allocation, with investors shifting focus from high-valued U.S. stocks to Chinese and European assets due to uncertainties in U.S. policies and currency risks [3] Group 2: Market Recovery and IPO Activity - Many Chinese companies have successfully completed IPOs or secondary financing, indicating that the market is on a recovery path [4]

Group 1: Positive Factors - The advancement of Sino-U.S. regulatory cooperation has alleviated the delisting risks for Chinese companies listed in the U.S. [2] - The Federal Reserve's interest rate cuts in 2024 are expected to enhance market liquidity, leading to a projected 116% year-on-year increase in fundraising for Chinese companies going public in the U.S. [3] - Specific industries such as biomedicine and hard technology are likely to benefit from U.S. market valuations that recognize innovation and high R&D investments [4] - The internationalization demand in sectors like new energy and autonomous driving has led to significant brand effects for companies like Zeekr and WeRide after their U.S. listings [5] - The U.S. has a more accommodating stance towards cryptocurrency companies, attracting Chinese firms to split their businesses and list in the U.S. [6] - New policies in China support the expansion of overseas listing channels, with the China Securities Regulatory Commission (CSRC) optimizing the filing process, resulting in a significant increase in the number of companies preparing for listings in 2024 [7] Group 2: Major Challenges - Geopolitical tensions and regulatory conflicts remain a concern, particularly with the U.S. Foreign Company Accountability Act posing potential delisting risks if Sino-U.S. audit cooperation falters [8] - Compliance pressures from China's Data Security Law require companies to separate sensitive operations or localize data storage, increasing listing costs [9] - Market performance is uneven, with over two-thirds of Chinese companies listed in the U.S. in 2024 experiencing stock price declines, while smaller firms face high issuance costs that diminish fundraising efficiency [10] - The Hong Kong Stock Exchange has lowered listing thresholds for specialized technology companies, creating competition for Chinese firms considering dual listings [11] - The A-share Sci-Tech Innovation Board is prioritizing hard technology companies, which may lead to local financing preferences [12] - Nasdaq's new rules set to be implemented by the end of 2024 will increase the difficulty for small and medium-sized enterprises to meet market capitalization requirements for IPOs [13] Group 3: Future Outlook - An optimistic scenario suggests that if Sino-U.S. regulatory cooperation deepens and the Federal Reserve continues to lower interest rates, leading tech and biomedicine companies could see a 20%-30% year-on-year increase in IPO fundraising [14][15] - A neutral scenario indicates that if regulatory deadlocks persist but geopolitical tensions remain manageable, a few companies may pursue dual listings or split non-sensitive operations for U.S. entry, resulting in moderate fundraising growth [16][17] - A pessimistic scenario predicts that if the Sino-U.S. tech conflict escalates and China tightens overseas listing approvals, IPO activities in the U.S. could nearly halt, accelerating the privatization of existing Chinese companies listed abroad [18][19] Group 4: Corporate Strategy Recommendations - Companies are advised to prioritize compliance by designing cross-border data and legal frameworks, such as VIE structures and independent data entities [20] - Diversifying financing strategies through a combination of A-share/H-share and U.S. listings can help mitigate risks [21] - Companies in hard technology should focus on local listings, while those with strong global attributes, like biomedicine, should target U.S. markets [22]