BEIJING — The risk of Chinese stocks delisting from U.S. exchanges has nearly halved after regulators reached an audit agreement, Goldman Sachs analysts said in a report Monday.

The China Securities Regulatory Commission and U.S. Public Company Accounting Oversight Board announced Friday that both sides signed an agreement for cooperation on inspecting the audit work papers of U.S.- listed Chinese companies. China's Ministry of Finance also signed the agreement.

"This is no doubt a regulatory breakthrough," Goldman Sachs' Kinger Lau and a team said, while cautioning that much uncertainty remains.

They pointed out the PCAOB said the deal was only a first step, while the Chinese side said they would provide "assistance" in the inspections.

The PCAOB said it planned to have inspectors on the ground in China by mid-September, and make a determination in December on whether China was still obstructing access to audit information.

The Goldman Sachs analysts said Monday their model "suggests that the market may be pricing in around 50% probability" that Chinese companies could be delisted from the U.S.

That's down from 95% in mid-March — the highest on record going back to January 2020.

In late 2020, the U.S. Holding Foreign Companies Accountable Act became law. It allows the U.S. Securities and Exchange Commission to delist Chinese companies from U.S. exchanges if American regulators cannot review company audits for three consecutive years.

Since March, the SEC has started to call out Alibaba and other specific U.S.-listed Chinese stocks for failing to adhere to the new law.

If U.S.-listed Chinese stocks, known as American depositary receipts, are forced to delist, the shares could plunge by 13%, the Goldman Sachs analysts estimated.

MSCI China could fall by 6% under such a scenario, the report said. The index's top holdings are Chinese stocks listed mostly in Hong Kong, such as Tencent and Alibaba.

A "no-delisting" scenario could send ADRs and MSCI China 11% and 5% higher, respectively, the report said.

Few China-based companies have listed in the U.S. following Beijing's scrutiny of Chinese ride-hailing company Didi's IPO in late June 2021. Regulators have since tightened restrictions on Chinese companies — especially those with at least 1 million users — wanting to list overseas.

However, China's securities regulator told CNBC in January it hoped overseas listings would resume once new rules took effect.

The CSRC in April released separate draft rules that deleted a phrase that would have prohibited detailed audits by foreign entities.

Earlier that month, the regulator said it had met with some accounting firms and told them to consider preparing for joint inspections.