Due to the slowdown in the listing of Chinese companies in Hong Kong and overseas, the number of Chinese TMT IPOs dropped to 30, with combined proceeds decreasing 86% to RMB 22.7 billion in the first half of 2019.
Mainland China TMT companies still preferred to choose to list in Hong Kong and overseas in the first half of 2019. 16 new listings (54%) were completed in Hong Kong and overseas, 13% was listed on the Main Board, while 23% on Shenzhen’s GEM Bboard and 10% on Shenzhen’s SME Board.
The 16 new listings in Hong Kong and overseas raised RMB 11.4 billion, accounting for 51% of the total proceeds. Shenzhen’s GEM Board raised RMB 5.4 billion (24%); the Main Board and Shenzhen’s SME Board collected RMB 3 billion (13%) and RMB 2.8 billion (12%) respectively.
Average price-to-earnings ratio of A-share TMT companies rebounded by 30 June 2019. As of 31 December 2018, the average price-to-earnings ratio of A-share TMT companies was 33 and by 30 June 2019, the average price-to-earnings ratio was 42.
“In the second half of 2019, we expect the launch of the STAR market and pilot registration system could boost the A-share IPO market and other sectors of the domestic financial market. TMT companies are still expected to dominate the IPO market. Semiconductor, artificial intelligence, 5G networks and industry 4.0 companies will continue to attract market attention. ”