China's tech, media and telecoms IPO market shrinks

Only 30 IPOs were recorded from companies in China's technology in the first half of this year, media and telecommunications (TMT) sector, compared with 40 during the second half of 2018, data from PwC showed.

Combined proceeds from these new listings also dropped 86 percent to 22.7 billion yuan (US$3.2 billion) during the same period.

In part, the decrease is attributable to a number of large-scale IPOs completed in Hong Kong, China and the US in the second half of 2018, including those from big names like Xiaomi and Meituan Dianping.

The majority of TMT companies from Chinese mainland still go public in Hong Kong and overseas markets, where 16 out of the 30 new listings were completed. 

Total proceeds from new TMT listings in Hong Kong and overseas markets were 11.4 billion yuan, while those on Shenzhen’s Growth Enterprise Market Board raised 5.4 billion yuan. 

The average price-to-earnings ratio of A-share TMT companies was 33 during the six months ending in June, down from an average of 42 in the previous half.

"In the second half of 2019, we expect the launch of the STAR Market and the pilot registration system could boost the A-share IPO market and other sectors of the domestic financial market," commented Wilson Chow, TMT Leader for PwC Global, Chinese mainland and Hong Kong. 

However, trade frictions could fuel uncertainties in the issuance and valuation of TMT IPOs listed in Hong Kong and overseas markets, while companies in sub-sectors such as semiconductors, artificial intelligence and 5G networks will continue to attract market attention, he noted.