Where are the mega-ipo deals?
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.
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.