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Hong Kong, 4 January 2021 – PwC expects Hong Kong market to hopefully hit a record breaking year in terms of total IPO funds raised and possibly regain the top position for most funds raised among the global IPO fundraising markets in 2021. Although there are still many global geopolitical and economic uncertainties, the expected total fundraising is between HK$420 and 460 billion in 2021 with the support of abundant funds and huge funding needs for corporate development. The new economy and US listed Chinese enterprises remaining as the main drivers for listing activities. The active listings activities of biotech companies in 2021 will gradually make Hong Kong the best listing platform for biotech companies in Asia.
There were 154 new listings in 2020 in terms of numbers of IPOs, of which 146 were Main Board listings, mostly comprised of retail, consumer goods & services companies and industrials, for which the number of listings decreased by 16% compared to the number of listings in 2019. The number of GEM Board new listed companies in 2020 also decreased compared to the number of listings in 2019. Eight companies were listed on GEM Board in 2020, a decrease of 47% year-on-year. Additionally, there were 2 companies listed by introduction on the Main Board and 8 GEM Board listing companies switched to the Main Board listing without any funds raised.
Total funds raised by IPOs in 2020 reached HK$397.7 billion, marking an increase of 25% from the previous year. With the level of activity in new economy enterprise listings and US listed Chinese enterprises second listings, there was a stronger performance on Main Board, which recorded HK$397.1 billion of total fundraising. This is an increase of 26% in funds raised. The funds raised on GEM Board stands at HK$0.6 billion. This represented a 40% decrease in funds raised.
Eddie Wong, PwC Hong Kong Capital Markets Services Partner says: “While being confronted by the COVID-19 pandemic as well as global geopolitical and economic uncertainties and other factors in 2020, Hong Kong IPO market had an amazing year yet again. There is a significant 25% increase in terms of total funds raised in 2020 compared to 2019, with total funds raised of HK$397.7 billion. Hong Kong ranks second in total funds raised among the global IPO markets and has been ranked among the top three globally for more than ten consecutive years.We have seen a further increase of biotech companies listings in Hong Kong in 2020 compared to in 2019. We expect this trend will remain active in 2021 and it will gradually make Hong Kong the best listing platform for biotech companies in Asia.”
PwC predicts 170 IPOs in 2021, with an estimated total funds to be raised of between HK$420 and 460 billion. The amount of IPO funds raised could potentially set a new record high for Hong Kong. The proposed expanded stock connect scheme will allow Hong Kong to offer more unique value and business opportunities for enterprises and investors.
Benson Wong, PwC Hong Kong Entrepreneur Group Leader says: “Supported by a healthy pipeline, 2021 will be a great year for the Hong Kong IPO market, we are confident that the total IPO funds raised will hit a record high. We expect Hong Kong to regain the top global IPO fundraising markets position for total funds raised in 2021. New economy and US listed Chinese enterprises are expected to remain as the main drivers for listing activities in 2021 on HKEX with the success of listing regulations reform. We welcome the proposed expanded stock connect scheme. This will allow Hong Kong to offer more unique value and business opportunities for enterprises and investors, playing an active and important role in establishing China’s multi-level capital market.”
Looking at Mainland markets, with the successful launch of the Science and Technology Innovation Board (STAR Market) since the end of 2018, it has successfully raised RMB 222.6 billion for 145 high-tech, innovative companies in 2020. Despite COVID-19, A-share market set a new record high on total funds raised and number of listings. There were 395 IPOs on 4 Main Boards in the Mainland, with a total of RMB 471.9 billion funds raised. The increases in number of IPOs and total funds raised were 97% and 86% respectively. PwC expects stabilised growth in the mainland markets, with 430-490 new listings and total funds raised of RMB 450-480 billion for 2021.