Investors have shown signs in the latter part of 2013 that they are ready to overcome their fear of Chinese stocks. That's a big change in risk appetite for what had become a "don't touch" list of U.S. listings from the hottest overseas market.
In 2010 alone, thirty-eight Chinese companies listed on U.S. exchanges. But by 2011, allegations of fraud by short-sellers, auditor resignations, stock delistings and investigations by the SEC all but killed the market. By 2012, privatizations outnumbered IPOs, and only two China-based companies went public in the U.S. in 2012—social entertainment platform YY and flash sales site VIPShop.
Both of the 2012 IPOs have performed well, and this year there have been eight Chinese company IPOs listed in the U.S.
David Williams, an investment banker with Palo Alto, Calif.–based Williams Capital Advisors, expects that number to double in 2014. "The wariness about Chinese stocks is gradually being overcome," Williams said. "Investors who were spooked out of the market are going to flow back in."
(Read more: World's top-performing stock markets)
Bigger than Twitter
The focus is likely to remain on Internet companies, the most common type of Chinese company to list in the U.S.—Chinese search engine Baidu and e-retailer Dangdang were modeled after successful U.S.-based Internet businesses and got high market valuations on U.S. exchanges.
This year's top China IPO has been online sports lottery 500.com. Travel search site Qunar has also performed. In fact, the eight Chinese company IPOs had an average increase through early December of 50.3 percent from their trading debut, according to S&P Capital IQ data.
(Read more: The hot IPO action will be in China)
"U.S. investors are growth-focused, and Chinese companies are delivering growth," said Brewer Stone, managing director at Pacific Crest Securities in San Francisco. "We are seeing good performance of quality companies listing out of China, particularly this fall, and that is opening up the new issue market."
If you're willing to pay 300 times EBITDA for Twitter—as investors currently are—why not an Internet company penetrating the largest market of all?