Chinese stock markets keep Didi, Foxconn subsidiary in orbit with planned local IPOs

As we noted in March, the Chinese government has begun to urge its most successful companies to list on domestic stock exchanges instead of looking for capital in New York. In that month, ecommerce giant Alibaba was reported to be “working on a plan to list on a stock exchange in its home market, China,” and its competitor JD.com, along with Tencent and Baidu, all indicated that they were heeding Beijing’s call back home.

Then, earlier this month, smartphone maker Xiaomi announced a massive $10 billion IPO in Hong Kong. An important factor attracting Xiaomi to Hong Kong was the stock exchange’s new dual-class rules, which allow founders to retain outsize decision-making power even as they dilute their ownership.

Today brings news that two more big IPOs are planned in China.

• Didi Chuxing, China’s ride-hailing leader, is “rumored to IPO in Hong Kong in the second half of the year at the soonest,” TechNode reports.
• Didi’s IPO could be worth $20 billion or more, according to estimates (paywall) from the Wall Street Journal that Didi’s valuation could jump from around $50 billion to $70-80 billion upon going public.
• Foxconn Industrial Internet (FII), a subsidiary of the company that famously makes iPhones, will go public in Shanghai with a $4 billion offer, according to its prospectus, the Financial Times says (paywall).
• FII will play an important role in Made in China 2025, Nikkei writes (paywall), noting a statement saying as much from the company’s chairman: “The company will aggressively devote itself into the realization of ‘Made in China 2025,’ becoming the world’s leading industrial, internet-focused smart manufacturing and technology solutions provider.”
• FII’s IPO could be “mainland China’s largest initial public offering in almost three years,” according to the FT. The company “makes electronic equipment, industrial robots and cloud computing components.”

Chinese stock markets just marked another recent victory with the planned listing of 234 mainland stocks in the MSCI Emerging Markets Index on June 1. The influential MSCI index is expected to prompt “up to $40 billion” in active flows toward Chinese securities, according to J.P. Morgan.