Yintech Falls Flat in U.S. Debut as Chinese Peers Seek Delisting

  • Trading firm sells shares amid record wave of delisting offers
  • China commodity rules are `relatively clear' in 2016, CEO Says

Yintech Investment Holdings Ltd., China’s largest online provider of spot commodity trading services, closed unchanged on its first trading day after raising $101 million in an initial public offering.

The American depositary receipts of Yintech ended at $13.50 in New York on Wednesday after the company sold 7.5 million shares at that price. Chinese companies have risen 21 percent on average on the first trading day in the U.S. in the past three years, according to data compiled by Bloomberg on firms with a market capitalization larger than $50 million. The IPO contrasts with a record wave of Chinese companies seeking to delist from U.S. exchanges.

Yintech is the second company from mainland China to go public in the U.S. in 2016 after BeiGene Ltd. Only 11 Chinese companies have sold shares in New York in the past year, while a record number of 39 corporations have received buyout offers to go private. Unlike those firms seeking to delist from U.S. exchanges and resell their shares in China at higher valuations, Yintech is aiming to raise money as well as learn from its presence in a developed financial market, according to chief executive officer Chen Wenbin.

“We want to learn more from the mature western markets and then serve our customers in China,” Chen said in a phone interview from New York on Wednesday.

Policy Risks

The Shanghai-based company highlighted the policy risks associated with commodity trading in China in its IPO prospectus, saying that the government can restrict the commodities available for trading in China or even prohibit online spot trading of certain securities.

Chen said the government measures so far this year have been relatively transparent. Traders have piled in to Chinese commodity markets, sending volumes of everything from steel to coking coal soaring and prompting the country’s commodity exchanges to step up efforts to boost margins and fees or issue warnings to investors.

“Our core business is on the spot trading, and we haven’t really felt any impact from the volatility of the future contracts or the stock market,” said Chen.

Yintech facilitates individual customers’ trading of silver, gold and other precious metals and commodities on China’s three major commodity exchanges, according to the company’s website.

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