While IPO activity was subdued globally in 2022 due to geopolitical tensions and multiple market uncertainties stifling economic growth, the IPO market last year remained buoyant in the A-share market last year as technology-focused boards began In the country to show more vitality.
Leading advisory firm KPMG calculates that the number of IPOs and total funding raised globally fell by 50 percent and 60 percent, respectively, year-on-year in 2022. The York Stock Exchange and Nasdaq are down more than 90 percent annually.
But the A stock market showed its resilience amid the global gloom. Although the number of initial public offerings shrank 15 percent year-on-year to 416 in 2022, the total financing rose 9 percent to 584.9 billion yuan ($87.03 billion), updating the record reached in 2021, According to professional services provider EY.
Zhao Haizhou said that deepening capital market reforms, strengthening the registration-based underwriting mechanism, and establishing a multi-layer capital market, has contributed to the A-share market’s record returns in 2022 when the global economy faced various challenges. , the leading equity offering in the Eastern Province for Deloitte’s Capital Market Services Group.
Notably, the IPO proceeds generated on the Shanghai Stock Exchange’s STAR Market – Board aim to sponsor “hard tech” companies, such as chip makers, biopharmaceutical companies and synthetic technology companies, account for 40 percent of the entire IPO. A-share market fundraisers in 2022, according to the EY account. This is the first time that STAR Market has outperformed the main A-share board as the big companies are listed in terms of IPO financing.
Moreover, of the 10 largest IPOs recorded on the A stock market last year, measured by proceeds, seven were listed on the STAR market.
Meanwhile, the number of registered IPOs for ChiNext in Shenzhen, Guangdong Province — the council for promoting the integration of traditional industries, new technologies and new business models — has reached 150 by the end of 2022, according to the latest data from the market tracker. Wind Info, surpassing all other panels in the A stock market.
As EY Assurance Partner Felix Fay understood, the development of “hard technology”, which has become a key national strategy in China, has promoted the structural changes in the A-share market in recent years. While financial service providers used to top the list in IPO proceeds, their leadership position has been displaced by technology, media and telecoms, biopharmaceutical companies and healthcare companies. Industrial companies with core technologies also received a catch-up in terms of IPO financing.
Fei said advanced manufacturing, which is expected to highlight China’s economic growth in 2023, will see more successful IPOs this year. Companies that use proprietary and cutting-edge technologies to produce new and unique products, which are also in line with the country’s strategic development path, will also lead the IPO activity on the Beijing Stock Exchange a year ago, which was launched to nurture technologically advanced small enterprises and medium-sized enterprises.
While the Bahrain Stock Exchange saw 75 new companies achieve a successful float in 2022, with total funding reaching 14.9 billion yuan, Deloitte estimates that as many as 120 companies will announce initial public offerings on the Bahrain Stock Exchange in 2023, with the arrival of Total revenue to 24 billion yuan.
The STAR Market in Shanghai is expected to see 120 to 140 new listings in 2023, with total donations estimated at between 305 billion yuan and 340 billion yuan. ChiNext is likely to accommodate 150 to 170 IPOs in 2023, with an estimated proceeds of more than 210 billion yuan, according to Deloitte.