Reuters: China’s Zero Krypton Technology shelves plans to list in U.S.

Chinese medical data company LinkDoc Technology Ltd. has shelved plans to list in the United States after Beijing restricted overseas listings by domestic companies.

It is the first Chinese company known to have pulled out of plans to list in the U.S. since the crackdown began last week. The online car giant Drip Global’s New York IPO comes just two days after Chinese cybersecurity regulators announced an investigation into it.

Reuters, which first reported the news, learned of the move from three sources with direct knowledge of China’s medical data.

Beijing authorities said on Tuesday they would tighten regulations on all Chinese companies listed abroad, a sweeping shift in regulatory policy that triggered a sell-off in U.S.-listed Chinese stocks.

Sources said the decision to cancel the Zero Krypton Technologies deal was due to the crackdown. One of the sources said the regulatory uncertainty has affected the company and investors.

Zero Krypton Technologies filed for an initial public offering in the U.S. last month and plans to price its shares after the U.S. market closes on Thursday. The company said it would list on the Nasdaq.

It had planned to sell 10.8 million shares between $17.50 and $19.50 per share. At the upper end of the specified range, the deal would have raised $211 million.

Zero Krypton Technologies, a medical data company backed by AliHealth’s information technology subsidiary, filed for an initial public offering (IPO) in the U.S. the same day, according to a June 14 Reuters report. Ali Health is the healthcare period platform of Alibaba Group Holding Ltd.

Beijing-based Zero Krypton Technology provides cancer-focused healthcare services, according to Reuters. The company’s revenue jumped 41 percent in the three months ended March 31. During the same period, net loss attributable to Zero Krypton Technology widened to 135.4 million yuan (about $21.17 million) from 61.6 million yuan a year earlier.

While some of the measures introduced by the Trump administration propose to strengthen accounting audit standards for foreign companies listed in the U.S., and companies that fail to comply could be delisted from the U.S. stock exchange within three years, China has been denying foreign governments and agencies access to the accounting audit transcripts of Chinese companies listed in the U.S.

Reuters reports that these rules have not deterred the company from its plans to list in the United States. Zero Krypton Technologies said it will use the proceeds of the offering to strengthen its research and development capabilities and for investments and acquisitions.