The average proceeds of new Initial Public Offerings in the Chinese mainland's A-share market stood near 1.5 billion yuan (US$228.9 million), the highest for the same period since 2008, as China embraces a new economy characterized by innovation and unicorn enterprises, according to the "1H2018 Chinese Mainland and Hong Kong IPO Report" released in Beijing yesterday.
Small and medium enterprise IPOs with proceeds below 1 billion yuan (US$152.6 million) saw a 79 percent and 71 percent drop respectively in terms of volume and proceeds, compared with 2017 levels. Meanwhile, IPOs from large enterprises with proceeds above 5 billion yuan (US$763 million) accounted for 35 percent in total proceeds.
Driven by giant enterprises and unicorn enterprises, funds raised by the top 10 IPOs totaled 58.3 billion yuan (US$8.9 billion), up 156% compared to the previous year.
The Hong Kong Stock Exchange ranked the world's top by deal number, with 98 new IPOs listed in the first half of 2018, including both priced and expected IPOs, the report said.
This can be attributed to new stock market incentive policies in the Chinese mainland and Hong Kong, saidTerence Ho, IPO Leader of EY Greater China.
"A series of policies and measures were released which facilitate listings of new-economy related enterprises and unicorn enterprises including internet, big data and cloud computing enterprises," said Ho.
In addition, the China Securities Regulatory Commission has taken measures to restructure and delist regulations to boost the quality of IPO companies. Since March 2018, more AI and new energy automotive technology companies have launched IPOs on the A-share market.
EY estimated that the number of IPOs will total 63 in the first half of 2018. Funds raised so far equal 93.1 billion yuan (US$14.2 billion), down 26% compared to 2017. The Shanghai Stock Exchange ranked sixth in the world by deal number, while by funds raised, the SSE and Shenzhen Stock Exchange ranked third and sixth, respectively.
In Hong Kong, IPOs were led by local companies and Growth Enterprise Market companies. EY estimated that there will be 98 IPOs in Hong Kong during the first half of 2018, up 44 percent compared to 2017, making the region the busiest exchange in the world.
EY predicts that new-economy enterprises will continue to boost IPO activities in the Chinese mainland and Hong Kong in the second half of 2018.
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