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China-to-US IPOs: more pain coming

China's latest crackdown of three of its technology companies has a clear message for firms looking to list in the US — and investors wanting to buy their shares.

DiDi Hangzhou Headquarters
Didi's headquarters in Hangzhou
VCG via Getty Images

The Chinese authorities have once again ramped up their crackdown of technology companies from the country.

The latest targets were Didi Global, Full Truck Alliance Co (FTA) and Kanzhun. All three are linked to the tech industry. Didi is a ride hailing firm that controls almost all of the market in the Mainland; FTA is an Uber-like service for truckers; while Kanzhun runs Boss Zhipin, a popular online recruitment platform.

But more importantly, all three firms recently listed in the US. Didi debuted last week on the New York Stock Exchange, after raising $4.4 billion from its listing. FTA started trading on the NYSE in June after bagging $1.57 billion from its IPO, while Kanzhun, which took $912 million from its deal, debuted on the Nasdaq in June.

In its announcements over the weekend, China’s internet regulator ordered Didi be removed from app stores, and demanded both FTA and Boss Zhipin to stop new user registration while it reviews their businesses.

China's focus on these three companies is not much of a surprise, given how vocal the authorities have been in the past year on reigning in firms linked to collecting data, as they put emphasis on greater oversight of data security.