Multiple policy effects boost corporate confidence in going public, and TMT company IPOs rebound in the second quarter
On September 14th, PwC released initial public offering data for Chinese technology, media, and communication industry companies in the first half of 2023. In the first quarter, there were 26 listings of TMT companies in mainland China, with a financing amount of 11.5 billion yuan, both of which decreased compared to the previous quarter; In the second quarter, driven by the domestic capital markets of the Science and Technology Innovation Board and the Growth Enterprise Market, TMT companies in mainland China saw a rebound in their performance in the capital market, with 40 listed companies and financing of 71.4 billion yuan, higher than the same period in 2022.
In the first half of 2023, the registration system will be fully implemented in the Chinese capital market. At the same time as the efficiency of reviewing issuance and the predictability of listing are further improved, the responsibility of intermediary institutions as "gatekeepers" in the capital market is also strengthened and compacted. The market ecology is constantly optimizing, and the multi-level capital market system is also becoming clearer.
Analysis of various sectors shows that in the first half of 2023, the Science and Technology Innovation Board (STAR Market) and the Growth Enterprise Market (GEM) remained the main listing choices for mainland TMT companies: there were 26 TMT industry IPOs on the STAR Market, with a financing amount of approximately RMB 60.6 billion, accounting for 74% of the total financing amount; There have been 13 TMT industry IPOs on the Shenzhen ChiNext board, with a total financing amount of approximately RMB 14.2 billion, accounting for 17% of the total financing amount. Another 14% of mainland TMT companies chose to list on the Beijing Stock Exchange, with a total of 9 companies receiving approximately RMB 1.2 billion in financing, accounting for 1% of the total financing amount; The proportion of mainland mainboard listings is 3%, with a total of 2 companies obtaining approximately RMB 2.8 billion in financing, accounting for 3% of the total financing amount. 24% of mainland TMT companies choose to list in Hong Kong and overseas, with a total of 16 companies obtaining approximately RMB 4.1 billion in financing, accounting for 5% of the total financing amount.
In March of this year, the Hong Kong Stock Exchange Limited released a consultation summary on the listing system of specialized technology companies and decided to add Chapter 18C to the main board's Listing Rules. PwC China Audit Partner Lin Xiaofan said, "The implementation of Chapter 18C further lowers the listing threshold for specialized technology companies that are still in the initial or incomplete commercialization stage, and will benefit enterprises in industries such as new generation information technology, advanced hardware, advanced materials, new energy sources, and energy conservation and environmental protection. Recently, the Hong Kong SAR government announced the establishment of a task force to promote stock market liquidity. This will also further promote the sustainable development of the Hong Kong capital market and attract more specialized technology companies to go public in Hong Kong."
In terms of the US stock market, a total of 19 mainland Chinese companies were listed on the US stock market in the first half of 2023, with a total financing amount of 473 million US dollars and an average financing amount of 25 million US dollars. Among them, the total financing amount of 6 TMT industry enterprises is 299 million US dollars, with an average financing amount of 50 million US dollars.
"In the first half of 2023, the number of Chinese concept stocks going public in the United States has rebounded." Weng Yingjing, partner of PwC's China Audit Business, believes that with the implementation of relevant regulations and rules for overseas listing filing management, a more transparent, efficient, and smooth overseas listing supervision and coordination mechanism is gradually being formed, which has provided standardized and effective support for Chinese enterprises' path towards overseas capital markets. The continuous smoothness of overseas listing channels will provide more choices and flexibility for mainland TMT companies to seek capital market listings