Following the 10-year high of IPO financing in 2020, the industry expects to reach a new high in 2021.
On January 4, PricewaterhouseCoopers released relevant data on the IPO market for 2020, showing that there will be 395 new A shares listed in 2020, with a total financing of 471.9 billion yuan. The number of IPOs and the amount of financing increased by 97% and 86% year-on-year respectively.
"Although the new crown epidemic has had an impact on the global economy, due to the rapid and stable recovery of China's domestic economy and the staged success of the registration system reform, the A-share listing activity has not been affected, but has shown an active trend." PwC Said Liang Weijian, partner in charge of Dao China's market.
The implementation of the registration system has accelerated the speed of A-share IPOs, and the number of IPOs issued through the registration system has exceeded the review system.
In 2020, there were 145 IPOs on the Science and Technology Innovation Board and 107 IPOs on the ChiNext, both exceeding the number of IPOs on the Shanghai Main Board (89 cases).
Looking forward to 2021, "A-share IPO financing may hit a new high in the past 10 years. It is estimated that in 2021, the number of A-share multi-level capital markets will receive 430 to 490 IPO companies, and the financing scale will be 450 billion to 480 billion yuan. "Liang Weijian’s judgment is based on the fact that this benefited from the new “dual cycle” pattern and the strategic opportunity of the central “14th Five-Year Plan” to enter a new development stage. Several supporting factors are good for the capital market and focus on the promotion of the full implementation of the registration system. Stock IPO will continue to maintain a good momentum of development.
2020 A-share IPO hits a 10-year high
In 2020, there will be 89 IPOs on the Shanghai Stock Exchange Main Board, 145 IPOs on the Science and Technology Innovation Board, 107 IPOs on the ChiNext Board, and 54 SME Boards.
Among them, the Sci-tech Innovation Board has been piloting the registration system for about one and a half years, and the ChiNext will be launched in August 2020.
At the same time, the sci-tech innovation board financing amount in 2020 will reach 222.6 billion yuan, ranking first among all sectors, while the sum of the financing amount of the main board, the growth enterprise board and the small and medium board is 249.3 billion yuan.
In 2020, the top ten stocks of IPO financing amounted to 141.7 billion yuan, accounting for 30% of the total IPO financing for the year.
Among them, the sci-tech innovation board has an exclusive share of seven, and its industries include chips, biotechnology, etc. SMIC leads the way with a financing amount of 53.2 billion yuan.
From an industry perspective, compared with the number of listings and financing amounts in the financial sector in 2019, the forefront of the IPO list in 2020 will be occupied by industrial products, consumer products and technology.
Specifically, the Shanghai Main Board IPO focuses on industrial products, retail, consumer products and services, the Science and Technology Innovation Board focuses on information technology, telecommunications and industrial products, and the Shenzhen Small and Medium Enterprise Board and the Growth Enterprise Market focus on industrial products.
In terms of the fully diluted P/E ratios of IPO companies, the P/E ratios of the Sci-tech Innovation Board and ChiNext are relatively high.
Among them, starting companies with a price-earnings ratio of 20 to 40 times, 52 on the Science and Technology Innovation Board and 74 on the ChiNext; starting companies with a price-to-earning ratio in the range of 40 to 60 times, 50 on the Sci-tech Innovation Board and 14 on the ChiNext The number of Shanghai Stock Exchange Main Board and SME Board is 2 and 0 respectively.
The market is also more concerned about whether the new stock price breaks.
According to statistics from PricewaterhouseCoopers, on the day of the IPO in 2020, there will be no break shares in the four sectors, but by the end of 2020, the stock prices of nearly 400 listed companies are less than 40% of the IPO price.
"This is a price guidance mechanism that is constantly handed over to the market to use investors' eyes to judge a company's price in the secondary market," said Sun Jin, a partner of PricewaterhouseCoopers China's integrated business services department.
Looking at the global market, China’s capital markets (Shanghai, Shenzhen, and Hong Kong markets) will raise US$120.2 billion in 2020, ranking first in the world.
The US Nasdaq and the New York Stock Exchange have raised more than US$80 billion in total.
From a single point of view, in terms of financing, Nasdaq is still the world’s largest financing market, followed by the basically flat Hong Kong and Shanghai markets, then the New York Stock Exchange, then the Shenzhen and London markets; in terms of market value, the New York Stock Exchange The exchange ranked first, Nasdaq ranked second, followed by Shanghai and Shenzhen markets, Hong Kong markets, and London markets.
In the current complex environment of Sino-US relations, many Chinese companies still choose to list in the US in 2020.
According to statistics from PricewaterhouseCoopers, in 2020, 31 Chinese concept stocks will land in the U.S. capital market, with a total financing amount of 12.1 billion U.S. dollars, and the financing amount has reached 4 times of 2019.
Among them, new energy vehicles, financial technology, Internet services and other industries are particularly favored by American investors, and the amount of funds raised in a single listing is above 1 billion US dollars.
The Science and Technology Innovation Board is expected to remain the main force in 2021
"In 2021, the registration system may be fully extended to the main board and the SME board. The introduction of new delisting regulations will also help A-shares build an ecosystem of survival of the fittest, improve the quality of listed companies, and accelerate the efficiency of resource allocation in the market. ." Sun Jin said.
So, in 2021, will the A-share market fully implement the registration system?
Yang Fang, a partner of PricewaterhouseCoopers China's audit department, told China Business News that there is still uncertainty about whether other A-share sectors will definitely implement the registration system in 2021.
However, in her view, since the pilot registration system, the A-share market has undergone some changes compared to the past: First, more new business formats and new economic companies have gone public on the Science and Technology Innovation Board and ChiNext, and the requirements for information disclosure are relatively high; Compared with the approval system, the review speed is faster, and the review time can be expected as a whole. Third, more rules regulating intermediary institutions have been introduced, and the issuers have been asked to promote a more healthy development of the A-share market.
What are the characteristics of the A-share market IPO in 2021?
Yang Fang said that relatively speaking, there should be some good companies to declare in 2021. Judging from the companies that have filed on the Science and Technology Innovation Board or ChiNext in the past two months, we can see that some of the more famous companies have submitted IPO information. .
This is because such companies have been on the sidelines or are making structural adjustments when the sci-tech innovation board just opened in 2020 or 2019.
She also said that from an industry perspective, companies applying for the Science and Technology Innovation Board in 2021 should still be concentrated in cloud computing, artificial intelligence, biomedicine and other industries.
"From the perspective of overall speed, the filing speed of each quarter is still slightly different, and there may even be a feeling that the overall filing speed in 2020 may be slightly slower than in 2019." Yang Fang said that the speed of companies filing for IPOs has increased. The reason for the delay is not that there are fewer hard-core companies, but may be a comprehensive consideration of factors such as market capacity and market environment.
So, will the slowdown in corporate filings also occur in 2021?
Yang Fang said that taking the Sci-tech Innovation Board as an example, there are currently more than 200 companies under review. Exchanges should also think of various strategies to ensure the speed of the review. After all, answer questions and submit submissions during the review process of the Sci-tech Innovation Board. The time for registration and other links is limited to ensure that there is no large backlog.
Looking ahead to the number of first-listed companies and the scale of financing in each segment of the A-share market in 2021, PricewaterhouseCoopers predicts that the number of listed companies on the Shanghai Main Board will be 100 to 110, and the financing amount will be between 100 billion and 110 billion; The number of listings on the board is 150 to 160, and the amount of financing is between 200 billion and 210 billion; the number of listings on the GEM is 125 to 150, and the amount of financing is between 110 billion and 120 billion; The number of listed companies ranges from 55 to 60, and the financing amount is around 40 billion yuan.
Author: Huang Siyu