Hong Kong IPO 2016 Q3 (Jun-Sep) Review and outlook fact sheet

Year 2016 Q1 - 3 Review

1. General Environment 

Review of the IPO market performance in 2016 Q1-3
  • Continuous improvement in market sentiment in Q3, while the number of newly listed companies and total fundraising size for the first three quarters in 2016 decreased year-on-year
  • Companies participate IPO activities in a positive attitude, the pipeline still strong, while economic factors are affecting IPO pricing, fundraising size and progress of listing
  • Financial sector dominates large cap IPOs
  • Small to medium sized IPOs remains active in Q3 from various sectors, but investors show caution
  • More overseas companies seeking IPO opportunities in Hong Kong, which improves the strengths and depth of the city's capital market
  • In terms of number of newly listed companies and fundraising, Hong Kong continues to hold firm a leading position in global IPO markets

2. IPO Summary (1 January to 30 September 2016)

I. NUMBERS
a) Number of newly listed companies 
Year 2016 
(Jan – Sept)
Year 2015 
(Jan – Sept)
Compare to Year 2015 
(Jan – Sept)
Compare to Year 2015 (Jan-Sept)
Main Board with funds raised 43 49 -12%
Switch from GEM (without funds raised) 4 12 -67%
Main Board listing by introduction (without funds raised) 3 2 +50%
GEM with funds raised 25 21 +19%
Total 75 84 -11%
  • The total number of IPOs in the first three quarters of 2016 is 75 as compared to 84 in the first three quarters of 2015.
  • The number of companies listed on the Main Board decreased from 63 in the first three quarters of 2015 to 50 in the first three quarters of 2016; the number of new listings on GEM increased from 21 in the first three quarters of 2015 to 25 in the first three quarters of 2016.

II. FUNDS RAISED

a) Summary of IPO funds raised 
 
  Year 2016 (Jan – Sept) Year 2016 (Jan – Sept) Compare to Year 2016 (Jan-Sept)
Main Board HK$132.4 billion HK$154.6 billion +14%
GEM HK$1.9 billion HK$1.8 billion +6%
Total HK$134.3 billion HK$156.4 billion -14%
  • Total IPO funds raised in the first three quarters of 2016 is HK$134.3 billion. This is a decrease of 14% as compared to the amount raised in the same period last year.

b) Average deal size (excluding companies that raised funds of more than HK$10 billion) 

  Year 2016 (Jan - Sept)* Year 2015 (Jan - Sept)*

Compare to Year 2015 (Jan-Sept)
Main Board ^ HK$1.5 billion HK$1.3 billion +15%

Notes: *excluding introduction / transfer of listing from GEM to MB which did not raise funds: Year 2016 - 7 ; Year 2015 - 14
^excluding companies that raised funds of more than HK$10 billion: Year 2016 - Postal Savings Bank of China and China Zheshang Bank; Year 2015 - Huatai Securities, GF Securities, Legend Holdings and China Railway Signal & Communication 

III. OTHER OBSERVATIONS 

a) Price-earnings (P/E) ratio
(i) Main Board – Analysis of new listings by fully diluted P/E multiple 
  Year 2016(Jan-Sept) Year 2015 (Jan-Sept)
  Number Percentage Number Percentage
< 10 15 35% 9 19%
10 - 15 15 35% 15 31%
15 - 20 5 12% 5 10%
20 - 30 4 9% 10 21%
30 - 50 3 7% 7 15%
50 - 100 1 2% 1 2%
100 - 200 - - 1 2%
Total 43* 100% 48^ 100%

Notes:*excluding 7 new listings (7 introduction/transfer of listing from GEM to MB without raising funds)
^ excluding 15 new listings (14 introduction/transfer of listing from GEM to MB without raising funds, and 1 with no profit) 

(ii) GEM – Analysis of new listings by fully diluted P/E multiple 

 

  Year 2016 (Jan-Sept) Year 2015 ( Jan-Sept)
  Number Percentage Number Percentage
< 10 4 18% 3 17%
10 - 15 3 14% 5 27%
15 - 20 4 18% 3 17%
20 - 30 8 36% 3 17%
30 - 50 1 5% 2 11%
50 - 100 2 9% 2 11%
Total 22* 100% 18* 100%

(ii)GEM - Percentage change of first day closing price over IPO price

  Year 2016 (Jan – Sept) Year 2015 (Jan – Sept)
  Number Percentage Number Percentage
0% to -30% 2 8% 1 5%
0% to 10% 2 8% 2 9%
10% to 50% - - 1 5%
50% to 100% 3 12% - -
100% to 500% 10 40% 8 38%
500% to 1000% 5 20% 4 19%
1000% to 3000% 3 12% 5 24%
Total 25 100% 21 100%

c) Industry (in terms of number of new listings) 

  Year 2016 (Jan-Sept) Year 2015(Jan-Sept)



Main Board
  • Financial services (34%)
  • Retail, Consumer Goods & Services (30%)
  • Industrial products (26%)
  • Information Technology & Telecommunications (8%)
  • Energy & Mining related (2%)
  • Financial services (17%)
  • Retail, Consumer Goods & Services (48%)
  • Industrial products (24%)
  • Information Technology & Telecommunications (6%)
  • Energy & Mining related (5%)


GEM Board
  • Retail, Consumer Goods & Services (48%)
  • Industrial products (32%)
  • Information Technology & Telecommunications (16%)
  • Financial services (4%)
  • Retail, Consumer Goods & Services (24%)
  • Industrial products (52%)
  • Information Technology & Telecommunications (14%)
  • Financial services (10%)

Contact us

Kitty Liu
Deputy Manager
Tel: +[852] 2289 8739
Email

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