Regulatory curbs hobble mainland China's IPOs, ceding first-half crown to Hong Kong
initial public offerings (IPOs) in Hong Kong, due to a regulatory crackdown that has hobbled fundraising since August 2023 and left the primary market in the lurch.
Some 50 companies raised a combined 33.6 billion yuan (US$4.7 billion) by selling new shares on the nation's three exchanges, according to data compiled by Bloomberg. That was a third of the US$13.5 billion raised on the Hong Kong stock exchange, which leapfrogged 12 spots from a year earlier to become the world's top-ranking IPO destination in the first half.
'As long as the regulatory curb remains in force, the IPO market won't return to normalcy,' said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. 'But the good thing is that as a result, more good-quality companies in emerging industries will be listed going forward.'
Mainland China's most valuable offering in the first half of the year was Zhongce Rubber Group, a Hangzhou-based tyre maker that drew 4.07 billion yuan by selling shares on the Shanghai Stock Exchange, according to Bloomberg. That was just a fraction of the US$5.24 billion that was raised in Hong Kong in May by Contemporary Amperex Technology, the world's largest maker of batteries for electric vehicles.
Consumer-electronics maker Arashi Vision came in second place on the mainland, pulling off a 1.94 billion yuan offering on the Shanghai bourse's tech-heavy Star Market. Shenzhen Kaifa Technology, which makes smart metering terminals, ranked third after completing an offering valued at 1.17 billion yuan on the Beijing Stock Exchange.
Holding shares of the 50 IPOs since their debuts on the mainland fetched an average return of 214 per cent, according to Bloomberg data. But those gains were inflated by regulations, as new shares were priced at around 23 times earnings in an effort to make sure there were no flops.
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