Number of IPOs on Chinese markets set to drop in 2018

IPOs estimated at 300 to 350, with amount of capital raised likely at US$28-US$31b this year

The number of newly-listed companies on the Chinese mainland is expected to slow in 2018 from a historic high last year, according to PwC.

The number of initial public offerings on the A-share, Shenzhen SME Board and ChiNext markets is slated to slow to around 300 to 350, with the amount of capital raised expected at 180 to 200 billion yuan (US$28-US$31 billion) in 2018, according to PwC's report released today.

Frank Lyn, markets leader of PwC Mainland and Hong Kong, said that the number of IPOs in 2018 "is expected to decline following the recently formed IPO review committee, which adheres to stricter criteria and is tightening regulations governing IPOs." 

The tighter regulations and criteria for IPOs have already led to a drop in their approval rate, according to PwC.

"Due to recent regulatory measures, it is likely that more companies looking at an IPO will begin to reappraise if listing is really the best route forward for them or not," said Jean Sun, assurance partner of PwC China.

In 2017, there was a historic high of 437 IPOs on the Shanghai and Shenzhen stock markets, a surge of 93 percent compared to 227 in 2016. The IPOs netted 235.1 billion yuan last year, up 56 percent from the 150.4 billion yuan generated in 2016.

"Benefiting from the vigorous small and medium-sized enterprises, a steady number of IPO approvals, a faster IPO approval procedure and stable issue price, IPOs were quite active in 2017," Lyn said.

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