Chinese capital market shows strong vitality

The Chinese mainland's capital market has shown strong vitality, with companies engaged in technological innovation, advanced manufacturing and green development expected to usher in new listing and development opportunities in 2024, mainly driven by the implementation of the across-the-board registration-based IPO system, said a new report released by global consultancy PwC.

The Chinese mainland is still leading the amount of financing in IPOs in global capital markets, despite the recent temporary tightening pace of IPOs nationwide. There are plenty of IPO opportunities for innovative enterprises that master key and core technologies, PwC said.

The report pointed out that the Hong Kong bourse's move to further lower the listing threshold for technology companies has demonstrated its determination to attract innovation-oriented firms to go public in Hong Kong.

The listing of innovative Chinese mainland technology, media and telecom (TMT) companies in the United States will likely further recover in 2024 amid signs of geopolitical tensions easing, it said.

There were 50 IPOs worldwide by Chinese mainland TMT enterprises in the second half of last year, down from the 66 IPOs recorded during the first half of 2023, PwC said. The total amount of financing for the 50 listings reached about 61.8 billion yuan ($8.6 billion), it added.

The domestic capital market was the main listing option for Chinese mainland TMT enterprises, with 24 percent choosing to be listed on the Shanghai Stock Exchange's STAR Market and 32 percent on the Shenzhen bourse's ChiNext board in the second half of 2023, the report showed.

A total of 12 Chinese mainland TMT enterprises chose to list on the STAR Market, raising about 33.9 billion yuan and accounting for 55 percent of total financing, while there were 16 TMT industry IPOs on the ChiNext involving financing of almost 13.7 billion yuan, making up 22 percent of the total.

Another eight Chinese mainland TMT enterprises chose to list on the Beijing Stock Exchange, which received about 1.5 billion yuan, occupying 2 percent of total financing. Additionally, 13 Chinese mainland TMT enterprises, or 26 percent of the total number of IPO-bound enterprises, opted to list in Hong Kong and overseas, netting 6.8 billion yuan, or 11 percent of total proceeds.

Wilson Chow, PwC global TMT industry leader, said the Beijing Stock Exchange will enter a phase of rapid development in 2024 and will provide new listing options for small and medium-sized tech companies, along with optimized measures allowing companies to get listed directly.

The Hong Kong bourse issued a consultation paper on the listing system for special tech companies last year, which indicated firms that are still in initial commercialization stages or have yet to complete commercialization will be allowed to apply to be listed on the bourse. The Hong Kong bourse will continue to attract tech companies to list, the report said.

The number of Chinese mainland companies going public in the US rebounded last year, said Emily Liu, PwC China Assurance Partner. The supportive attitude of authorities toward qualified private enterprises to list overseas, as well as the maturity of regulations for the filing-based management of Chinese companies' overseas IPOs will pave the way for Chinese mainland TMT companies seeking public floats abroad, Liu added.