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China TMT IPOs tally US$23.6 billion in H1 2022
China Mobile’s US$7.66 billion domestic listing on main board largest during period
The Asset 18 Aug 2022

Over the first half of the year, there were 68 initial public offerings (IPOs) by mainland Chinese technology, media and telecommunications (TMT) enterprises, a slight decline from the 74 recorded during the second half of 2021, according to recently released data.

The total amount of financing increased to 160.4 billion yuan (US$23.6 billion), according to data published by PwC. China Mobile’s domestic listing on the main board was the single largest TMT industry IPO for the first half of the year in mainland China, which raised approximately 52 billion yuan (US$7.66 billion).

“Driven by the domestic Star and ChiNext markets, Chinese TMT enterprises remained relatively active in the capital market in the first half of 2022,” says Jianbin Gao, PwC mainland China TMT industry leader.

Over the period, the domestic capital market remained the preferred option for mainland TMT IPOs, PwC research shows. Of the mainland TMT enterprises that listed domestically, 30, representing 44% of the overall number, opted for Shanghai’s Nasdaq-style Star Market and 19 enterprises, accounting for 28%, listed on the ChiNext Market in Shenzhen.

Financing raised by the 30 enterprises listing on the Star Market raised a total amount of roughly 70.9 billion yuan, making up 44% of the total raised, while the financing amount of the 19 IPOs on the ChiNext Market in Shenzhen accrued an estimated 27.8 billion yuan, accounting for 17% of all financing.

Another six mainland TMT enterprises or 9% chose to list on the Beijing Stock Exchange, which received about 1.1 billion yuan, accounting for 1% of the total financing. An additional four entities, equating to 6% listed on the main board. Altogether, they garnered about 55.9 billion yuan in financing, accounting for 35% of the total.

A further nine enterprises or 13% chose to list in Hong Kong and overseas. They received around 4.7 billion yuan in financing, accounting for 3% of the total financing raised.

In the first half of 2022, there were 41 IPOs in the technology hardware and equipment industry, accounting for 60% of all TMT IPOs. The software and service industry saw 26 listings, equating to 39%, and the media industry had one listing, making up 1%.

Over the first half of the year, with the exceptions of China Mobile (listing on the main board) and KE Holdings (secondary listing in Hong Kong), the revenues of NIO Motor and Huitongda Network that listed in Hong Kong were significantly higher than other enterprises that listed during the same period. This led to an increase in the average revenue recorded by enterprises listing in Hong Kong and overseas.

For TMT companies other than those listed on the Star Market, the average price-to-earnings (P/E) ratio of A-share listed enterprises declined at the end of June 2022, compared with the previous period. The average P/E ratio of A-share TMT companies decreased from 41 times (as of December 31 2021) to 33 times (as of June 30 2022) but remains at a high level.

As of June 30 2022, among the enterprises listed on the Star Market, 167 TMT companies had a total financing amount of 296.5 billion yuan, an average financing amount of 1.776 billion yuan, and an average initial P/E ratio of 85 times.

Since the listing of the first batch of companies under the ChiNext registration system on August 24 2020, a total of 330 companies have been listed on ChiNext, with a total financing amount of 300.7 billion yuan and an average financing amount of 911 million yuan. The average initial P/E ratio was 35 times. Altogether, 69 TMT companies account for a total financing amount of 63 billion yuan, an average financing amount of 910 million yuan, and an average initial P/E ratio of 42 times.

“The implementation of the State Council’s 33 stabilisation policies will further boost the recovery of the Chinese economy as well as the capital market in the second half of 2022,” Gao adds. “Domestic TMT enterprises should still prefer mainland China and Hong Kong for primary listing.” 

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18 Aug 2022