Chinese TMT companies zero in on Hong Kong for public debuts

Their combined IPO proceeds accounted for more than half of total proceeds at $32.11b.

Chinese technology, media and telecommunications (TMT) companies are increasingly looking to overseas capital markets like Hong Kong for their public debuts, according to accounting firm PwC, as IPO proceeds from the Asian financial centre accounted for more than half of $62.7b (50.2b yuan) raised the second half of 2017.

“Looking ahead, TMT companies which are not yet profitable, will be considering the possibility of listing in Hong Kong and overseas because of the higher threshold for domestic listing,” said PwC China and Hong Kong TMT Leader Wilson Chow.

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The number of Chinese TMT companies listing shares in Hong Kong or overseas soared in Q4, with a mere eight IPOs raising $32.11b (25.7b yuan), accounting for 52% of total proceeds in the second half of 2017.

Over the course of 2017, Chinese TMT IPOs extended a growth streak that began in Q3 of the previous year, with the A-share market emerging as the main channel for Chinese TMT listings.

In the second half of 2017, 16% of Chinese TMT companies listed in Hong Kong and other overseas markets; 41% opted to list on the GEM in Shenzen, 27% on the Main Board; another 16% on the SEM in Shenzen.

“Recent reforms of listing rules for companies with dual-class share structures, and bio-tech companies without profit or revenue, will further enhance the attractiveness of the Hong Kong stock market for Chinese TMT companies in 2018,” Chow added.