Where are the mega-ipo deals?

Singapore Business Review - - FINANCIAL INSIGHT: IPOS & EQUITIES -

Hong Kong’s IPO ac­tiv­ity and per­for­mance con­tin­ued to be vi­brant in the first half of 2018 with a to­tal of 108 new list­ings, which is around a 59% in­crease in vol­ume com­pared to the 68 new IPO list­ings from the same pe­riod last year. In terms of value, how­ever, to­tal funds raised of the new list­ings in the first half of 2018 reached HK$50.4B, which is around an 8% de­crease from the HK$54.8B funds raised from the list­ings in the first six months of 2017.

Hong Kong’s GEM board, mean­while, posted a stronger per­for­mance, which recorded 50 IPOS that raised HK$3.4B of to­tal funds, ac­cord­ing to data from PWC. This is a sig­nif­i­cant in­crease, 43%, in vol­ume of com­pa­nies list­ing in the bourse, whilst the in­crease in to­tal funds raised from the same pe­riod last year is 31%. The main board, on the other hand, raised a to­tal of 58 new list­ings in the first six months of 2018, with to­tal funds raised reach­ing HK$47B, which is a 57% in­crease in the num­ber of Main board IPOS but a 10% de­crease in to­tal funds raised.

“Look­ing back at the mar­ket per­for­mance in the first half of 2018, we can see the IPO ac­tiv­i­ties are very ac­tive, with the num­ber of IPOS reach­ing a new record high,” Ringo Choi, EY Asia-pa­cific IPO Leader said. “Whilst in terms of funds raise, due to the lack of mega-ipos, the global IPO rank­ing of the Hong Kong mar­ket reaches only the fifth place tem­po­rar­ily. As a mat­ter of fact, all the top 10 IPOS were not listed in Hong Kong.”

Ed­ward Au, Co-leader of the Na­tional Pub­lic Of­fer­ing Group of Deloitte China, noted that part of the de­cline in terms of value in most new IPO list­ings in Hong Kong is be­cause of the dom­i­nance of small and medium-sized is­suers in the ter­ri­tory’s lo­cal bourse—some­thing that may even­tu­ally a boon for Hong Kong’s eq­uity mar­ket in the long-run.

Notable deals

Some of the largest do­mes­tic IPOS by Hong Kong is­suers in the first half of 2018 in­clude med­i­cal provider C-MER Eye Care Hold­ings Limited’s $83.99m in pro­ceeds in HKEX in early Jan­uary. Other top deals in­clude the $66.74m in pro­ceeds from Tsit Wing In­ter­na­tional Hold­ing in the con­sumer sta­ples sec­tor; the $29.42m in pro­ceeds from Time In­ter­con­nect Tech­nol­ogy Limited in the in­dus­tri­als sec­tor; the $28.53m in pro­ceeds from Thing On En­ter­prise Limited in the real es­tate sec­tor; and the $28.04m in pro­ceeds from LH Group Limited in the re­tail sec­tor.

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