Chinese tech, media, telecom IPOs decline in H1
The first half of 2020 saw a total of 55 Chinese technology, media and telecom (TMT) IPOs down from 74 listings in the second half of 2019, according to a latest PwC report.
Total IPO proceeds were 97.2 billion yuan (US$14 billion) after JD.com and NetEase both completed secondary listings in Hong Kong, contributing a big chunk of proceeds over the period.
The STAR Market remained the main venue for the listing of Chinese mainland TMT companies, with 38 percent of such companies choosing to list there.
The STAR saw 21 enterprises raise about 25.2 billion yuan, which accounted for 26 percent of total financing value.
“The secondary listing on the Hong Kong market by overseas-listed Chinese companies will pave the way for more similar listings and also boost Hong Kong’s market value and appeal as a global IPO hub," said Frank Lin, PwC Chinese mainland assurance partner.
Global setbacks may cast an uncertain outlook on valuation and listing volume in the second half of the year, he pointed out.
In the first half of 2020, five out of 20 TMT companies listed in Hong Kong and overseas recorded losses after listing rules were altered at the Hong Kong bourse.
However, the combined profit size of Hong Kong-listed Internet giants NetEase and JD.com far exceeded those of other loss-making ones, keeping the average net profit of Hong Kong and overseas listed companies high.
The pilot registration system at ChiNext will further enhance the inclusiveness of the capital market for innovative and entrepreneurial enterprises, especially TMT enterprises, the report suggests.