The humiliating implosion of Luckin Coffee was supposed to serve as a cautionary tale about the dangers of US-listed Chinese companies. Once the hottest of start-ups, the coffee chain revealed in April that its employees had fabricated many of the sales reported for 2019. Luckin shares crashed 75 per cent in one day. Prospects for mainland companies hoping to raise capital in the US seemed bleak.
Yet if there is a crisis of confidence in China Inc it is not showing up in stock markets. Last week, Kingsoft Cloud, one of China's top cloud services providers, successfully raised more than half a billion dollars in its US IPO. The stock popped more than 40 per cent in its first day of trading on Nasdaq. That was even after the company increased the number of shares it sold at the last minute to meet demand.
So far this year, nine Chinese companies have managed to go public in the US and have raised a combined $918m, according to data from Refinitiv. That puts the pace slightly ahead of this time last year, when 11 companies raised $640m.