Over 200 IPOs expected this year

Huang Yixuan
PwC review notes a steady A-share market in the first half with initial public offerings that included Baofeng Energy, which raised more than 8 billion yuan.
Huang Yixuan

The A-share market was steady in the first half of this year, and over 200 initial public offerings are expected in 2019 with total deal size exceeding 180 billion yuan (US$26.17 billion), PwC said on Tuesday.

The company released its review of the IPO market in the first half of 2019, showing there were 64 IPOs in Shanghai and Shenzhen, marginally higher than the same period last year, while the sums raised through these offerings were down 35 percent year on year to 60.4 billion yuan.

Of these 64 IPOs, 27 were completed on the main board of the Shanghai Stock Exchange, with a value of 33.1 billion yuan, while there were 12 IPOs completed on Shenzhen’s SME Board, amounting to 11.3 billion yuan, and the 25 companies listed on the Shenzhen ChiNext Board raised 16 billion yuan.

The IPOs were predominantly from companies engaged in industrial products, consumer goods and services, information technology and telecommunications.

The largest A-share IPO was Baofeng Energy, which raised more than 8 billion yuan.

Meanwhile, four banks were listed on the A-share markets in the first half of the year — Zijin Bank, Qingdao Bank, Xi'an Bank and Qingnong Commercial Bank — exceeding last year’s total.

Of note, from the announcement in early November last year to the formal opening in June, China's capital market has ushered in a new sci-tech board. 

By the end of June this year, 141 companies had already had their IPO applications accepted on the STAR Market. Most of these companies are from the information technology, biomedicine, high-end equipment manufacturing and new material industries, according to the report.

Regionally, the largest number of applicants are from Beijing, Jiangsu, Shanghai, Guangdong and Zhejiang.

Up to now, the issuance and listing arrangements of the first three stocks have been announced, and it is expected that the number of listed enterprises on the board will be close to 100, PwC said.

“The STAR Market is the central focus of capital markets this year. Its relaxed issue conditions have increased inclusiveness, but intermediaries’ responsibilities will be further strengthened to protect the interests of investors,” says Geoffrey Wang, assurance market leader of PwC Chinese mainland and Hong Kong.

“The introduction of the STAR Market and the trial implementation of the new registration system will promote the A-share IPO market in the second half of 2019. We expect over 200 IPOs in 2019, with a total deal size of over 180 billion yuan,” Wang said.

Jean Sun, firmwide corporate services partner of PwC China, said that the STAR Market’s impact on China’s capital market is significant, as its valuation model will lead market funds to aggregate into high-quality stocks and better guide the capital market, which will encourage innovation in key technologies and enhance the competitiveness of the real economy.

“At the same time, the STAR Market pilot registration system will help create a standardized, transparent, open and dynamic capital market,” Sun added. “The STAR Market and London-Shanghai Stock Connect are important steps in the opening of China’s capital markets, which will help the internationalization of the A-share market.”

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