Chinese TMT Firms' 1st-Half IPOs Fell 47% From Last Year, PwC Says
Duan Qianqian
/SOURCE : Yicai
Chinese TMT Firms' 1st-Half IPOs Fell 47% From Last Year, PwC Says
(Yicai Global) Sept. 11 -- Chinese technology, media and telecom companies floated 26 initial public offerings in the first half, down 47 percent from last year, per data UK-based professional services firm PricewaterhouseCoopers released today. Th a drop of nearly one-half.Tauter admintration of the A-share market the major cause of the fall in TMT company IPOs, Cai Zhifeng, PwC's managing partner for the Chinese media sector, told Yicai Global. Examinations and approvals slowed in the first half as regulation and verification became more stringent, raing the bar for entry into the A-share market. New rules implemented th year are also buffing Hong Kong's luster, as are its advantages in lting costs and price-earnings ratios, which one reason the ranks of TMT firms voting with their feet for the Hong Kong bourse are growing.  

MI Group and China Tower finhed IPOs in succession on Hong Kong Exchanges and Clearing in July. Th year a bumper one for Hong Kong IPOs, with the special admintrative region's market seen as one of the most popular public financing markets in the second half in mainland China, Hong Kong and all over the world, said Zhou Weiran, PwC's managing partner for the TMT field.

New economy firms lted in Hong Kong confront cr, however, as their stock prices slump below their IPO prices. Beijing-based Xiaomi's share price dropped to HKD16/share (USD2.04) on the first day, 6 percent under its HKD17 IPO price. China Tower's stock price slipped below its IPO price of HKD1.26 and closed at HKD1.23, 2.4 percent lower than the IPO price on its sixth day of lting.

Chinese TMT companies' IPO financing amount totaled CNY57.8 billion (USD8.5 billion) in a re of 15 percent on the previous year, though IPOs decreased in quantity because several giant companies finhed theirs in the first half. For example, the lting of Foxconn Industrial Internet [SHA:601138] netted up to CNY27 billion (USD4 billion).

A-share companies are logging an overall decline in their price-earnings ratios, Zhou said. TMT companies have stronger capacity to withstand pressure than those in other areas, and so their markets will rebound. Giant TMT concerns lted overseas will enjoy higher price-earnings ratios than those in A-shares and will increase those of their sectors as well after they return to the A-share fold with the clarification of corporate debt restructuring rules.

Editor: Ben Armour

Follow Yicai Global on
Keywords: TMT , IPO