AF Indexes

Chinese Display Company Ostin Soars 890% in Nasdaq Debut

Companies from Southeast Asia are keen to fill the void left by Chinese firms, which have become less keen about IPOs in the US amid political tensions with Washington, Beijing's tighter scrutiny of firms seeking overseas listings and the domestic slowdown (AFP file photo).

Shares in Ostin Technology Group soared more than 890% in its Nasdaq debut on Wednesday, as shareholders maintained keen interest in Chinese US-listed stocks despite geopolitical tensions and a spreading threat of delisting.

Nanjing-based Ostin, a Chinese supplier of display modules, recorded the best first-day surge for a debut share this year, according to Renaissance Capital data. Its stock closed at $39.66, up 891.5% on its opening price of $4.

On Tuesday, Ostin said it has raised $13.5 million from its IPO. The company is considered a “microcap” stock, given its market capitalisation of less than $250 million.

Microcap companies are considered risky because they are new, often have no proven record, and any size of trade can have a large percentage impact on the price of the stock, according to a US Securities and Exchange Commission definition.

“Many microcap companies do not file financial reports with the SEC, so it’s hard for investors to get the facts about the company’s management, products, services, and finances,” it added.

The smallest US public companies, with market capitalisation of less than $50 million, are sometimes referred to as “nanocap stocks”.

George Russell

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.