Citigroup has highlighted that a growing number of Asian companies are expected to pursue stock listings in the United States, as technology firms seek higher valuations and aim to tap into the deep capital pools of the world's largest equity market.

Adrian Nye, Head of Issuer Services for Japan, North Asia, and Australia at Citi, noted that Asian tech companies are looking to boost their valuations by issuing American Depositary Receipts (ADRs) in the US. Data compiled by the firm shows that the average price-to-earnings ratio for companies in the Philadelphia Semiconductor Index is approximately 22 times, which is more than double that of their Asian counterparts.

"There are already several large and attractive deals in the ADR pipeline," Nye said in an interview, though he did not provide specific details on size or timing. He also pointed out that the surge in stock prices driven by the artificial intelligence (AI) boom has created a favorable environment for the sector.

Data indicates that Asian companies have raised approximately $28 billion through ADR offerings so far this year, marking the highest annual total since 2020. A massive $26.5 billion listing by SK Hynix Inc. (SKHY.US) dominated the activity, while a $1 billion initial public offering from Japanese payment services provider PayPay Corp. (PAYP.US) also contributed to the total. The offering by SK Hynix not only opened new investor channels but also helped narrow the valuation gap with competitors like Micron Technology (MU.US).

Previously, Taiwan Semiconductor Manufacturing Co. (TSM.US) successfully attracted significant foreign capital inflows through its US listing, further solidifying its popularity among American investors. However, chip-related stocks remain volatile, leading to a cautious market sentiment. Last month, the global chipmaker sector experienced a sell-off due to concerns over massive AI investments by hyperscalers.

Despite this, following the record-breaking listing by the South Korean memory chip giant, its Japanese peer Kioxia Holdings has announced plans to launch an ADR next year. Additionally, Samsung Electronics is reportedly in the early stages of evaluating a US listing, inspired by the success of its domestic competitor. "The ADR new-issuance pipeline is currently quite well-stocked," Nye added.