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Summary of article:
Hong Kong stock IPO financing reached a 16-year high this year, but the pace of listings slowed in October. Recently, many companies have delayed or eliminated the issuance of H-shares before listing, which shows that the market has shifted from competing for speed to focusing on merit and price.
Since October, the Hong Kong stock IPO market no longer continued the previous high-frequency listing rhythm. Only three companies, Yiswei Computing, Transan Holdings and Dongshan Precision, were listed that month. Recently, many companies have taken the initiative to brake on the eve of Hong Kong stock listing.
But overall, the issue side of the Hong Kong stock IPO market remains hot this year. Wind data shows that as of October 30, a total of 118 companies were listed on the Hong Kong Stock Exchange during the year, and the amount of Hong Kong IPO financing reached HK$401.3 billion, an increase of 83% over last year. The amount of financing has reached a new high since 2011, and is only HK$13 billion less than the historical peak of HK$414.4 billion in 2010.
Shanghai Securities News reported that industry insiders believe that the discrimination of Hong Kong stock IPOs will become increasingly obvious in the future. Only companies that truly have technological breakthroughs, globalization capabilities, and good corporate governance can win the long-term trust of international investors. As Hong Kong stocks continue to adjust, competition among institutional investors for Hong Kong stock IPOs has shifted from competing for momentum and quota to selecting assets and negotiating prices.
Although the IPO financing amount of Hong Kong stocks this year reached a 16-year high, due to the bustling market, many companies have recently taken the initiative to brake on the eve of Hong Kong stock listing.
With only three calendar days left before the original listing date, Weiyi Intelligent Manufacturing suddenly slammed the brakes and announced on October 25 that it had decided to postpone the global sale and listing on the main board of the Hong Kong Stock Exchange after considering a number of factors, including current market conditions.
Jiangsu-based cultural tourism company Slender West Lake Cultural Tourism announced on October 20 that it has decided to postpone its global offering and its planned listing on the main board of the Hong Kong Stock Exchange. On September 17, financial technology company Sifang Jingchuang announced the postponement of its global offering, just five days before the original Hong Kong stock listing date. In addition, the departure bell was ringing for Hong Kong stocks when Yongkang Holdings also announced the suspension of the IPO listing.
In addition, about 20 A-share companies have chosen to discontinue the issuance and listing of H-shares.
Three Squirrels announced on August 29 that based on comprehensive consideration of the market environment and the company’s own development plan, and adhering to the principle of protecting the interests of shareholders and being responsible to shareholders, after careful discussion and analysis by the company, the board of directors agreed that the company will terminate the issuance of H shares and list on the main board of the Hong Kong Stock Exchange. The Company’s current operating conditions are normal. Cessation of the issuance and listing of H Shares is a prudent decision taken by the Company based on a comprehensive assessment of multiple factors and the actual situation.
In addition to the Three Squirrels, several A-share companies, including Lacala, Linglong Tire, Cooltech Power, Huahai Qingke and Dayang Electric, issued announcements during the year to end the issuance of H shares.
Ji Wenhe, in charge of the national listing business of Deloitte China Capital Markets Services Department, said that when companies list in Hong Kong, they need to take into account the market environment of the industry, the waiting period and the stock market performance after the listing of H shares. If the expected results cannot be achieved, switching to another financing method is a rational option that is responsible to shareholders.
Summary FAQ
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The pace of Hong Kong stock IPOs has slowed significantly since October. Unlike previous high-frequency issuances, only three companies were listed that month, namely Yiswei Computing, Transian Holdings and Dongshan Precision.
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As of October 30, 118 companies have been listed on the Hong Kong Stock Exchange during the year, with IPO financing amounting to HK$401.3 billion, an annual increase of 83%, and a new high since 2011. This is only HK$13 billion away from the historical peak in 2010.
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The article pointed out that due to factors such as market conditions, waiting period, and post-IPO performance, some companies hit the brakes on the eve of listing; If expected results are difficult to achieve, changing the financing method is considered a rational choice responsible to shareholders.
