IPOs of Chinese TMT firms drop in H1

CHINESE companies’ initial public offerings in the telecommunications, media and technology industries fell in the first half, with the number of deals down 47 percent from a year ago, PwC said in a recent report.

Total proceeds rose 15 percent to 57.8 billion yuan (US$8.5 billion).

“The slower approval pace of IPOs in the domestic market curbed domestic listings, while Hong Kong’s revised listing rules attracted more listings in the first half,” said PwC China TMT Partner Frank Lin.

The pace of domestic IPOs would remain stable in the near future, while listings from TMT companies in the Hong Kong market would reach a peak in the second half, he said.

The three largest Chinese TMT IPOs in the first half of 2018 were Foxconn Industrial Internet Co Ltd, iQiyi Inc and Bilibili, whose combined proceeds made up 77 percent of the total amount of IPO funds raised over the period.

Among the 26 Chinese TMT IPOs in the first half, 12 chose to list in Hong Kong or overseas markets, accounting for 46 percent of the total number of deals, while 31 percent listed on the growth enterprise market in Shenzhen.

Tencent-backed lifestyle services platform Meituan Dianping is set to list in the Hong Kong stock market later this month, and a number of Internet service providers are also eyeing overseas listings.

But the PwC study noted that Sino-US trade friction could fuel uncertainties in IPO issuance and the valuation of TMT companies.