80 VC/PE-backed Listings Raise US$28.41B
SHANGHAI, China, Dec. 7 /Xinhua-PRNewswire/ -- Year 2007 marks a record for Chinese enterprise IPOs in terms of both offer amount and diversity of listing markets and sectors. According to Zero2IPO Research Center -- the research arm of Zero2IPO Group -- as of November 30, 2007, 203 Chinese enterprises offered a combined US$88.52B on domestic and overseas markets. Specifically, 98 overseas shares raised US$34.21B.
The domestic market outstripped overseas counterparts by attracting 105 enterprises, which offered US$54.32B. The decrease in overseas offer amounts made overseas listing markets and industrial distribution tilt towards diversity, while the domestic offer amount attracted more mega IPOs.
Of 203 debuts, 40% were backed by VC/PE funds, raising US$28.41B and accounting for 32.1% of total 2007 offerings excluding December. Fifty VC/PE-backed overseas IPOs raised US$13.68B, while 30 VC/PE-backed domestic IPOs raised US$14.73B.
Table 1 IPO events & offer amount by market
(Please refer to the link at the bottom of the page.)
-- Overseas listing markets and sectors tilt towards diversity but offer
amounts drop year-on-year
-- Chinese enterprises’ overseas IPOs were flat based on the data for
the first 11 months of 2007.
As effects of Provisions for Foreign Investors to Merge and Acquire Domestic Enterprises (M&A Rules), effective since September 8, 2006, were not revealed in such a short time, the overseas IPO events increased year-over-year. The increased IPO events have yet to uplift the offer amount. The current year total overseas offer amount excluding December slightly decreased against the same period of last year (first 11 months of 2006). Even worse, the average offer amount fell by 40%. About 38.8% IPOs raised below US$100.00M each; 42.9% debuts offered between US$100.00M and US$500.00M each; only 10 listings or 10.2% of the total raised US$1.00B all from HKMB (See Table 4).
The Chinese enterprises’ overseas IPOs tilt towards diversity in two aspects:
1. The listing market is diversified. Though HKMB led in attracting
China-based IPOs, the offer amount dropped year-over-year. The IPO
events and offer amount on NYSE, SGX and NASDAQ were increased
greatly.
TSE, MOTHERS and KOSDAQ attracted Chinese IPOs.
2. The industry of Chinese listings is diversified. Traditional listings
remained the champion, but the listing proportions in services, broad
IT and bio/healthcare were increased (See Table 2 & Table 3).
Table 2 Overseas IPO events and offer amount by market (as of November)
(Please refer to the link at the bottom of the page.)
Table 3 Industrial distribution of overseas IPOs (as of November)
(Please refer to the link at the bottom of the page.)
Table 4 Top 10 overseas IPOs (as of November)
(Please refer to the link at the bottom of the page.)
Unprecedented IPO events in domestic market:
Services & traditional enterprises offer majority amount
Year 2007 created unprecedented flourishing levels of opportunity for Chinese IPOs. The completion of non-tradable shares reform in 2006 and the resumed IPOs provide favorable conditions for domestic stock market to create unprecedented IPO events. The mega debuts such as China Construction Bank and PetroChina floated on the A-share market.
Till November 30, 105 debuts raised US$54.32B from the domestic market, exceeding the overseas and domestic offer amount in the same period of last year (first 11 months of 2006) -- nearly fourfold of that offered on the domestic market in the first 11 months of 2006.
The domestic average offer amount was lifted by 76.5% year-on-year due largely to IPOs of large-size State-owned enterprises -- especially financial institutions. Eleven mega debuts with each offer amount over US$1.00B raised a combined US$46.63B, representing 85.9% of the total domestic offerings of the entire year of 2007 excluding December (See Table 6 & Figure 1).
Table 5 Domestic IPO events & offer amount (as of November)
(Please refer to the link at the bottom of the page.)
Figure 1 Domestic IPO events and offer amount by quarter
(Please refer to the link at the bottom of the page.)
Table 6 Top 11 domestic IPOs (as of November)
(Please refer to the link at the bottom of the page.)
Regarding industrial distribution, the services and traditional sectors remained the leads in domestic offer amounts and IPO events respectively. Though IPO events and offer amounts increased in Broad IT and Bio/healthcare sectors, the overall proportion was slightly decreased. It is regretful that no other hi-tech enterprise debuted on the domestic market so far. Compared with overseas peers, domestic listings were more centralized (See Table 7).
The higher offer amount in the services sector was distributed by Chinese banking shares. The Industrial Bank Co., Ltd, CITIC Bank, Bank of Communications, Bank of Nanjing, Bank of Beijing, Construction Bank of China and Bank of Ningbo raised US$18.33B on Shanghai and Shenzhen bourses. Notably, the CITIC Bank raised US$5.94B from the Shanghai Stock Exchange and HKMB.
Table 7 Industrial distribution of domestic IPOs (as of November)
(Please refer to the link at the bottom of the page.)
Exits via IPOs sustain growth: Domestic market outstrips overseas peers in offer amount
2007 is a financing year for Chinese entrepreneurs. As of November 30, 80 VC/PE-backed Chinese enterprises raised US$28.41B comprising 32.1% of the total offerings this year excluding December. The overseas markets attracted 50 VC/PE-backed Chinese enterprises, increasing over 100% year-over-year, but the offer amount was only US$13.68B -- below one half in the same period of last year. Why? A majority of those IPOs were small-sized private-owned enterprises.
In comparison, the domestic market outstripped overseas peer in offer amount. Thirty VC/PE-backed Chinese enterprises debuted on the domestic market, six-fold of that in the same period last year. The offer amount was US$14.73B, approximately 100 times of that in the same period last year and higher by US$1.04B against the overseas offer amount. The surged offer amount marks the increasingly mature Chinese stock market and reveals investment results of VC/PE funds in China during recent years.
Table 8 IPO events and offer amount of VC/PE-backed IPOs (as of November)
(Please refer to the link at the bottom of the page.)
Table 9 Top 10 VC/PE-backed IPOs (as of November)
(Please refer to the link at the bottom of the page.)
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http://www.zero2ipo.com.hk/china_this_week/detail.asp?id=5420
About Zero2IPO Research Center
Established in Nov. 2001, Zero2IPO Research Center aims to provide professional research reports and custom researches for relevant professionals in the Greater China Region. Our research ranges from venture capital, private equity, IPO, M&A to TMT industries. Currently, Zero2IPO Research Center has become the most prestigious research institute in China VC and PE field.
In addition, the Research Center launched the first online database in China -- Zero2IPO-China VentureDatabase in December 2007, collecting the latest, in-depth and all-around data, covering China VC, PE, M&A, and IPO fields to satisfy the needs of the profession.
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