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HONG KONG, April 13 (Reuters) - Chinese AI cause StepFun is unwinding its offshore incorporation operation to pave the mode for a planned Hong Kong archetypal nationalist offering, 3 sources said, arsenic Beijing tightens scrutiny of a strategy wide utilized for overseas fundraising.
China's securities regulator said past period it had instructed immoderate alleged "red-chip" companies that are registered abroad, chiefly successful taxation havens, but clasp assets and businesses successful China via equity ownership, to unwind the operation nL1N40505Y.
Experts person said the determination could hold immoderate listings https://www.reuters.com/sustainability/boards-policy-regulation/hong-kong-ipo-pipeline-set-suffer-amid-beijings-scrutiny-red-chip-listings-2026-03-18/ arsenic red-chip companies scramble to alteration their domicile backmost to China, and immoderate mightiness adjacent person to wantonness their IPO plans arsenic changing the ineligible operation of the institution could beryllium cost-prohibitive.
Shanghai-based StepFun, which develops general-purpose instauration models, has decided an onshore firm operation would beryllium much due arsenic it is heavy backed by authorities capital, said 2 of the sources with cognition of the move.
Its operation had progressive the Cayman Islands, according to firm records.
All of the sources declined to beryllium named discussing StepFun's alteration of firm operation due to the fact that the accusation was not public. StepFun did not respond to Reuters' requests for comment.
StepFun's investors see concern vehicles of the Shanghai municipal and territory governments arsenic good arsenic Qiming Venture Partners and Chinese exertion elephantine Tencent Holdings, according to nationalist disclosures and media reports.
Founded successful April 2023 by erstwhile Microsoft Vice President Jiang Daxin, StepFun is regarded arsenic 1 of China's starring AI startups that person successfully developed large-language instauration models.
REGULATORY GUIDANCE
The determination by StepFun highlights however immoderate Chinese companies are rushing to conscionable the caller regulatory guidance to support offshore listing hopes live and pat into beardown capitalist request for caller shares issued by Chinese AI and semiconductor firms, among others.
After a bumper IPO twelvemonth for Hong Kong successful 2025 with funds raised surging 231% to $37 billion, much than 530 companies person filed applications arsenic of past month to list, astir of them Chinese, banal speech information shows.
It was not wide however galore are red-chip companies. But past year, one-fifth of 131 Hong Kong listings China approved progressive offshore holdings, the bulk of which utilized the red-chip structure, according to Chinese instrumentality steadfast Hankun.
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