A screen shows stock prices soaring at the offices of the Taiwan Stock Exchange following U.S. President Donald Trump’s surprise decision to suspend global tariffs in Taipei, Taiwan, April 10, 2025.
Daniel Cheng | Anadolu | Getty Images
Asia has no shortage of entrepreneurs, engineers and huge domestic markets. But the region continues to lag behind when it comes to creating blockbuster products like those seen in the United States.
The challenge is not a lack of technical ability. In China, India, South Korea, and Japan, companies dominate industries ranging from semiconductors and electric vehicles to robotics and advanced manufacturing. The bigger question is whether Asia’s capital markets are structured to grow companies into large-scale public companies.
“While Asia has the technology, scale and talent base to support mega-IPOs, capital markets remain constrained by structural and behavioral factors,” said Lenny Zephyrin, founder of Zephirin Group.
Large publicly traded companies are emerging in Asia, but few are as large as the largest U.S. technology companies.
Memory chip maker Changxin Memory Technology (CXMT) is planning an IPO in Shanghai that is expected to raise at least 29.5 billion yuan ($4.3 billion), which could be the country’s largest after 2022, while Indian telecom company Jio Platforms is seeking a valuation of around $120 billion in its planned IPO.
By comparison, SpaceX’s valuation is $1.77 trillion, up from more than $2 trillion when it first started trading.
Valuation premiums have historically led some of Asia’s biggest technology companies to explore the U.S. market. Chinese internet giant alibaba and JD.com Both companies listed in New York to access deeper international capital pools and later pursued listings in Hong Kong.
Common themes are emerging across the region. Companies often face less patient private capital, stricter listing requirements, and lower valuation multiples than their U.S. peers.
“The big driver in the U.S. is that there is so much private capital now available through private equity firms to take these types of companies to the point where they can go to market at very high valuations,” said John Fildes, a partner at Bain & Company.
Analysts agreed that the U.S. market continues to reward technology companies with higher valuation multiples than Asian exchanges.
China and Hong Kong: Technology is not a constraint
China undoubtedly has the industrial base to produce companies as large as the largest technology companies in the United States. Our leadership in artificial intelligence, semiconductors, robotics, and advanced manufacturing proves that innovation is not the main bottleneck.
Instead, analysts point to the financial ecosystem.
“China certainly has the industrial capacity, market size and talent pool to create giant companies,” said Wenjie Ding, investment strategist for global capital investments at China Asset Management.
Although China’s venture capital industry generally operates with shorter investment horizons than in the United States, cross-border capital remains more restricted and institutional investors are less willing to fund long-term, high-risk innovations.
Ding argued that greater allocations from domestic insurance companies and pension funds, as well as expanding cross-border investment channels through Hong Kong, would help reduce inequality.
Zephyrin said Hong Kong has the infrastructure to provide services at a very large scale, but lacks the ecosystem to consistently produce them.
The city’s biggest IPOs have historically been dominated by banks rather than venture-backed technology companies, but the analyst-driven valuation narrative remains underdeveloped.
South Korea: World-class industry, evaluation discount
South Korea is home to globally competitive semiconductor, battery and technology companies, but industry experts said the market structure prevents many companies from achieving U.S.-style valuations.
Peter Kim, global investment strategist at KB Financial Group, said: SK Hynix and samsung electronics Currently accounts for about half of the benchmarks Kospi The rest of the market remains relatively small. Even SK Hynix is planning a U.S. listing, as investors increasingly reward semiconductor companies with higher valuations overseas.
Other strengths, such as automotive and shipbuilding, are in industries that traditionally trade at low valuation multiples.
Analysts also pointed to the chaebol system of family-run conglomerates.
“Chaebols were at the heart of South Korea’s industrial catch-up, but they are now more of an obstacle than a help in creating new independent listing champions,” Polka Mishra of Javelin Wealth told CNBC in an email.
He added that the long-standing “Korean discount”, concentrated ownership, and historically limited underlying investment are also suppressing mega-IPOs. Recent governance reforms and a new underlying investor framework may improve confidence, but meaningful participation from long-term institutions such as the National Pension Service will likely be needed for South Korea to achieve sustained large-scale listings.
India: Strong demand but domestic ambitions too
India has a strong IPO market supported by strong domestic participation from retail investors, mutual funds and pension capital.
Jio Platforms’ planned listing could be a watershed moment for Indian capital markets. The communications and digital services giant has filed for an IPO that is expected to value the company at about $120 billion.
But even at that size, India’s tech flagships will remain largely domestic and under pressure to show early profits, leaving them well below the valuations of the largest U.S. tech IPOs.
Pranav Saita, Partner, EY India, said the market has shown unusual resilience due to structural changes to equity investments, and systematic investment plans and pension funds continue to support listings despite the period of volatility.
But analysts say it will take more than abundant demand to pull off a mega-IPO.
“India, with its strong economy and rich entrepreneurial talent, is well-positioned for many IPOs. However, the time is not yet ripe for a mega-IPO on the scale of some of the largest listed companies in the US,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
He argues that India’s largest technology companies are still primarily focused on the domestic market rather than pursuing global scale. Many startups also operate low-margin businesses such as food delivery or quick commerce, but investors typically demand profitability much earlier than their U.S. peers.
“The deep private equity funds that are available in the US are not available to Indian startups,” said Mr. Vijayakumar. “Also, there is pressure on Indian startups to show profits early, so they pursue profits over growth.”
Collectively, analysts describe a gap that extends beyond individual exchanges. The US benefits from a wealth of venture capital willing to fund companies for a decade or more before going public, deep institutional and private participation, extensive analyst coverage, and investors willing to pay for future growth.
But the bigger picture is that Asia is gradually building many of the same materials. India’s domestic savings pool continues to deepen, China restarts its technology lending pipeline, South Korea advances governance reforms, and Hong Kong remains the region’s gateway for international capital.
—CNBC’s Ellyani Hanis contributed to this report.
