On December 30, with the listing of three new shares such as Tianyuan environmental protection on the same day, the number of IPO listed enterprises in the A-share market has reached 523 this year.
Driven by the continuous reform of the registration system, A-Shares ushered in the IPO year in 2021, breaking a number of historical records. Data show that a total of 523 A-share companies landed on A-shares this year, including 199 on the gem, 121 on the main board, 162 on the science and innovation board and 41 on the Beijing stock exchange, raising a total of 543.6 billion yuan. The number of IPOs and the amount of funds raised have reached a record high.
Under the registration system, the market environment of survival of the fittest has been strengthened, and the valuation level of new shares with different textures has rapidly differentiated after listing. This year, there are not only Dook Media Group Limited(301025) , Suzhou Nanomicro Technology Co.Ltd(688690) , Henan Liliang Diamond Co.Ltd(301071) and other new shares with amazing growth on the first day of listing, but also 14 new shares broke on the first day of listing. China Telecom Corporation Limited(601728) became the “fund-raising king” of listed new shares this year, with 47.904 billion yuan as the highest; Hemai shares became the highest new issue price in the history of A-Shares at an issue price of 557.8 yuan.
A-share IPO hit a new high
As one of the basic functions of the capital market, IPO is not only the main way for enterprises to raise funds directly, but also an important means for the capital market to serve the real economy.
The data show that in 2021, 523 A-share listed companies raised a total of 543.6 billion yuan through IPO, compared with 437 A-share IPO companies in 2020, with a total annual fund-raising of 480.6 billion yuan. In 2021, the number of IPO companies and fund-raising amount increased by 20% and 13% respectively year-on-year.
In 2021, the number and amount of IPOs in the A-share market reached a record high. Previously, the highest number of A-share new shares was 438 in 2017; In terms of the total actual fund-raising scale, this year is the first IPO in the history of a shares, with the financing amount exceeding 500 billion yuan, and the previous record was 484.5 billion yuan in 2010.
Overall, the IPO companies listed in 2021 are mainly technology stocks. The top three industries are computer, communication and other electronic equipment manufacturing (62), special equipment manufacturing (54), and chemical raw materials and chemicals manufacturing (37).
According to regional statistics, the top five regions are Guangdong (92), Zhejiang (87), Jiangsu (86), Shanghai (48) and Beijing (40). According to the financing amount, the top five are Beijing, Guangdong, Zhejiang, Shanghai and Jiangsu, accounting for 72% of the total financing amount.
It is worth noting that this year, the number of IPOs on the gem exceeded that on the science and innovation board, and the financing amount of the science and Innovation Board took the lead. Data show that of the 523 new shares listed this year, nearly seven are issued through the registration system. In 2021, there were 361 IPO companies on the science and innovation board and gem, accounting for 69%, raising 202.9 billion yuan and 147.5 billion yuan respectively. In November 2021, after the opening of the Beijing stock exchange, 41 companies landed on A-Shares and raised a total of 7.5 billion yuan.
In October last year, the State Council proposed to “comprehensively implement and implement the securities issuance registration system step by step”. The implementation of the registration system has effectively promoted the listing speed of the science and innovation board and the gem. The central economic work conference held a few days ago proposed to “fully implement the stock issuance registration system”.
Benefiting from the implementation and promotion of the reform of the registration system, the issuance rhythm of A-share IPO has been significantly accelerated this year compared with previous years. 2019 is the first year of the registration system. In that year, the fund-raising amount of A-share IPO reached 253.2 billion yuan, nearly double that of 2018 (137.8 billion yuan). Subsequently, the IPO fund-raising amount in the A-share market increased year by year, reaching 480.6 billion yuan in 2020 and exceeding 500 billion yuan in 2021.
Anxin Securities pointed out that the key move of the pilot registration system has dredged and widened the entrance of the capital market, brought obvious changes to the A-share new share market, and the support effect of the capital market on the real economy and industrial transformation is more and more obvious. “Under the registration system, the issuance of new shares is more market-oriented, which is the main reason for the steady growth of A-share listed companies.” Market participants pointed out.
From the perspective of fund-raising, the fund-raising situation of enterprises varies greatly due to the influence of enterprise texture, market environment and industrial policies. This year, the average financing amount of new shares decreased. 523 listed companies raised an average of 1.039 billion yuan, of which nearly 80% raised less than 1 billion yuan, and 10 companies raised less than 100 million yuan.
IPO market performance differentiation
On August 20, China Telecom Corporation Limited(601728) which landed on the main board of Shanghai Stock Exchange was the largest IPO in the year, with a fund-raising amount of 47.904 billion yuan; The smallest fund-raising is Kaiteng Seiko, with a fund-raising amount of 47 million yuan.
Statistics show that the top 10 IPO projects this year include China Three Gorges Renewables (Group) Co.Ltd(600905) (22.713 billion yuan), Baiji Shenzhou (22.160 billion yuan), Shanghai Rural Commercial Bank Co.Ltd(601825) (8.584 billion yuan), Zhuzhou Crrc Times Electric Co.Ltd(688187) (7.555 billion yuan), Everdisplay Optronics (Shanghai) Co.Ltd(688538) (7.106 billion yuan), Xinjiang Daqo New Energy Co.Ltd(688303) (6.447 billion yuan), Hemai shares (5.578 billion yuan), Sino Biological Inc(301047) (4.980 billion yuan) and Tianneng Battery Group Co.Ltd(688819) (4.873 billion yuan).
Among the enterprises listed on the science and innovation board, the gem and the Beijing stock exchange, a total of 106 enterprises have realized over raising of funds, accounting for nearly 30%. The most over raised amount belongs to the most expensive new share Hemai shares. The company originally planned to raise 730 million yuan, but the actual fund raised was 5.578 billion yuan.
With the rise of the issuance price of enterprises, the yield of investors fell, and the breaking of new shares on the first day is no longer new in the A-share market.
Data show that as of December 29, a total of 14 IPO companies in Shanghai, Shenzhen and North stock exchange broke on the first day of listing.
The biggest decline on the first day of listing this year was Liaoning Chengda Biotechnology Co.Ltd(688739) , with the issue price as high as 110 yuan and more than double the raised funds. However, it broke quickly on the first day of listing, and the share price immediately fell 37.5%.
Since Daxin cancelled the capital subscription for new shares and changed to the market value subscription, shareholding Daxin has become the institutional dividend of a shares, and this is also a win-win policy. However, in the view of many market participants, the breaking of new shares on the first day is a normal phenomenon. Sun Jinju, assistant to the chief president of Kaiyuan securities and director of the Research Institute, said that from the development experience of mature capital markets, breaking is also the only way for the marketization of new share issuance. The first day breaking rate of China concept shares listed in the United States is as high as 40%, and the first day breaking rate of new shares listed in Hong Kong, China is also about 15%.
In the history of resumption of trading, there have been seven rounds of new shares since the opening of a shares. But breaking continues, playing new is not unprofitable. A senior executive of a venture capital institution from the primary market told the securities times that 41 new shares were broken in 2012, but from the historical data, the new income in that year was still very considerable. “The reason is very simple. After the intensive breaking of new shares, many investors who could not bear the risk of breaking out withdrew from the subscription, which greatly increased the success rate of new shares. Although the increase after the listing of new shares decreased as a whole, due to the significant increase in the success rate, the new income in 2012 is still very considerable.” The aforementioned venture capitalists said.
the comprehensive registration system is about to be implemented
Although the actual fund-raising amount and the number of IPOs in Shanghai and Shenzhen stock markets reached a record high in 2021, under such a high base, looking forward to the direct financing market next year, some institutions are still optimistic with the implementation of the comprehensive registration system.
Haitong Securities Company Limited(600837) pointed out that after the opening of the science and innovation board and the opening of the Beijing stock exchange, the capital market reform is expected to speed up. Indirect financing has always been the most important way of financing in China. The proportion of direct financing has been lower than 30%, far lower than 60% in the United States. It is urgent to improve the proportion of direct financing, especially the development of equity financing. With a series of reforms in recent years, the capital market has continued to expand, and the number and market value of listed companies have increased rapidly.
Fei Fan, partner of Ernst & Young audit services, said that China and Hong Kong are still the regions with the most active IPO activities in the world, accounting for 25% and 28% of the global IPO volume and financing respectively. The reform of the mainland securities law and the subsequent launch of the gem registration system, the partial improvement of the science and innovation board system, the establishment of the Beijing stock exchange, the return of pilot red chips and the transfer of selected layers of the new third board mean that China’s capital market is opening a new era.
“At present, hundreds of IPO applications are still under review. It is expected that the number of IPOs and total fund-raising will remain high next year.” Investment bankers interviewed pointed out that this was mainly driven by many listing applications on the science and innovation board and the gem, showing the confidence and recognition of investors and the market in these two sectors. In terms of industry, information technology, media, telecommunications and high-end industrial markets account for 67% of the total number of listing applications, and are expected to remain the main driving force of the A-share IPO market.
According to the data of Shanghai and Shenzhen Stock Exchange, as of December 29, 93 IPO projects on the science and innovation board were in the review stage, while 292 IPO projects on the gem were under review, indicating that the reserve force for IPO in the coming year is still sufficient.
The Beijing stock exchange was established in September this year and the first batch of companies of the Beijing stock exchange were listed in November. So far, a total of 11 new shares of the Beijing stock exchange have been successfully listed. The Beijing stock exchange has promoted the financing ecological development of the multi-level capital market.
Yang Shujuan, managing partner of Ernst & young Beijing, believes that the Beijing stock exchange has played a positive role in the institutional reform of the capital market and is also a further pilot of the registration system, which helps to improve the vitality of the new third board market. Small and medium-sized enterprises have new ways to go public, which solves the problems of difficult and expensive financing. For primary market investors such as venture capital and private equity investment, it has increased their exit channels and improved the opportunities for secondary market investors of Beijing stock exchange and new third board to participate in investment and share the dividend opportunities for the growth and development of innovative small and medium-sized enterprises. Financial institutions, including investment banks and intermediary businesses, get new opportunities, which is conducive to the vigorous development of the whole ecosystem.
Looking forward to 2022, Deloitte expects that the A-share new share market will continue to grow with the support of the rising number of new shares on the science and innovation board, the gem and the Beijing stock exchange. Most of the new shares will come from small and medium-sized manufacturing and technology enterprises. In 2022, there will be 170 to 200 new shares on the science and innovation board, raising 210 billion to 250 billion yuan; In the same year or another 210 to 240 new shares will be listed on the gem, raising 160 billion to 180 billion yuan. The Shanghai and Shenzhen main board is expected to have 120 to 150 new shares, raising 200 billion yuan to 230 billion yuan.
At the same time, the policy of overseas listing of mainland enterprises has gradually become clear. Recently, the CSRC solicited public opinions on the relevant systems and rules for overseas listing. The direct and indirect overseas listing activities of domestic enterprises shall be subject to unified filing management, and the overseas issuance and listing of domestic enterprises shall perform the filing procedures. No additional thresholds and conditions shall be set to support legally compliant domestic enterprises to use overseas capital markets for financing development.
Tong Chuanjiang, managing partner of A-share listing business of Deloitte China capital market service department, said that with the increasingly mature ecological environment for cultivating innovation and the development of new economic companies and the support of the new listing system of overseas issuers, in 2022, the Hong Kong market will welcome more dual primary and secondary listings of China concept shares listed in the United States. The highlight of Hong Kong’s new share market in 2022 will be the accelerated listing of zhonggai shares, followed by the listing of high growth enterprises in the region. Deloitte China’s capital market service department predicts that there will be about 120 new shares listed in the Hong Kong market, raising about HK $330 billion.
(Securities Times)
