Tighter controls cause drop-off in new TMT sector IPOs on Chinese bourses
The number of new listings by Chinese mainland companies in the technology, media and telecommunications (TMT) sectors on the science and innovation board and the ChiNext bourse has dropped off due to tighter registration controls, a new report shows.
The total amount of financing for the 78 listings in the first half of the year reached 213.8 billion yuan (US$33 billion).
The decline in Chinese TMT company listings to 78 compared with 109 in the second half of 2020. Overall proceeds dropped from 249.6 billion yuan to 213.8 billion yuan, the latest PwC report shows.
A total of 34 Chinese mainland TMT companies completed overseas listings and raised altogether 175.8 billion yuan, accounting for 82 percent of the overall financing value.
Chinese TMT companies continued to perform strongly in the global capital market, driven by the listing of Chinese enterprises in the United States and the secondary listing of China concept stocks on the Hong Kong capital market, PwC pointed out.
A string of secondary listings of overseas-listed Chinese Internet companies, including Baidu and Bilibili, yielded a combined 52.9 billion yuan in financing in the first half, accounting for a quarter of total financing of TMT IPOs.
Kuaishou Technology was the largest IPO of a Chinese mainland TMT company in the first half, raising around HK$48.3 billion (US$6.2 billion).
"The appeal of the Hong Kong IPO market for China concept stocks is anticipated to keep growing over the second half of 2021 following requirements from both China and the US that would further slow down the pace of Chinese enterprises listing in the United States," added Wilson Chow, PwC Global TMT Industry Leader.
Major telecommunication operators like China Telecom's recent listing on the A-share market also paves the way for the development of larger TMT enterprises, PwC suggested.
Science and technology enterprises with advanced technology are expected to be the focus in the second half, with continuous refinement and improvement of the STAR Market and indicators for evaluating scientific innovation have been further clarified.
