Statistics
Chinese IPOs Mint More TMT Millionaires
Along with mergers and acquisitions, IPOs are important sources of new wealth for individuals.
The number of technology, media and telecoms-linked initial public offerings – important liquidity events – rose in the second half of 2018, tripling total proceeds from a year earlier to reach RMB225.9 billion ($33.6 billion).
The figures, released from PricewaterhouseCoopers, follow recent figures by that firm on merger and acquisition trends in China – also important drivers of new high net worth individuals. TMT firms typically dominate the IPO market.
The PwC report showed that there were 40 TMT share market flotations in the second half of last year. China Tower Corp, Xiaomi Corp and Meituan Dianping completed the three largest Chinese TMT IPOs in terms of proceeds in the second half of 2018.
The figures are all the more encouraging, PwC said, as they were logged at a time of concerns about US-China trade tensions.
“Since many TMT unicorns went public in Hong Kong and overseas in 2018, the total proceeds of IPOs raised by Chinese TMT companies soared. Hong Kong became one of the world’s hottest IPO markets in 2018. With a decline in global economic growth and uncertainties around Sino-US trade negotiations, Chinese TMT IPOs in the Hong Kong and US markets will see a slowdown in 2019,” Wilson Chow, PwC global, Mainland China and Hong Kong TMT leader, said.
In the second half of 2018, 31 Chinese TMT companies chose to list in Hong Kong or overseas, with their proceeds accounting for 94 per cent of the total. Two Chinese TMT companies were listed on the SEM in Shenzhen, four on the Main Board, and three on the GEM in Shenzhen.
Among the 31 TMT companies that launched IPOs in Hong Kong or overseas in the second half of 2018, 19 were in the red, making the average net profit of listed TMT companies in this sector fall into negative territory.
As reported last week, merger and acquisition activity in China was broadly unchanged last year, standing at $678 billion.
Last year UBS and PwC reported on the scale of billionaire wealth being created in China.
