A-share market shows resilience amid uncertainties

Shanghai Stock Exchange. [Photo/Sipa]

While initial public offering activity declined globally in 2022 due to geopolitical tensions and many market uncertainties that hampered economic growth, the IPO market remained buoyant in the A-share market last year as The country’s technology boards began to show more vitality.

As calculated by leading consulting firm KPMG, the number of IPO cases and public funds raised worldwide will drop by 50 percent and 60 percent, respectively, year-on-year in 2022. . The York Stock Exchange and Nasdaq have fallen by more than 90 percent annually.

But the A-share market showed itself amid the global gloom. Although the number of IPO filings fell 15 percent year-on-year to 416 in 2022, total financing rose 9 percent to 584.9 billion yuan ($87.03 billion), according to professional services provider EY. renews the record reached in 2021.

The deepening of capital market reforms, the development of the registration-based IPO mechanism and the establishment of a diversified capital market in 2022 contributed to the record high revenue in the A-share market, said Zhao Haizhou. . , for the capital market services group at Deloitte, the eastern region’s A-share offering leader.

It should be noted that the IPO proceeds made on the STAR Market in the Shanghai Stock Exchange – the board that targets “hard technology” companies, such as chip makers, biopharmaceutical companies and artificial technology companies, account for 40 percent of the IPO. grow all year round. fundraising in 2022 in the A-share market, according to EY’s calculations. It is the first time that the STAR Market is listed on the main board of A-shares, which has great capabilities in the field of IPO financing.

In addition, among the 10 largest IPOs registered on the A-share market last year, measured by revenues, seven are listed on the STAR Market.

Meanwhile, the number of IPO cases registered on ChiNext in Shenzhen, Guangdong province – the board that promotes integration between traditional industries and new technologies and new business models – according to the latest data from the market tracker , reaching 150 by the end of 2022. Wind Info outperforms all other boards in the A-share market.

As understood by Felix Fei, partner of EY Assurance, the development of “hard technology”, which has become a key national strategy in China, is causing structural changes in the A-share market in recent years. While financial service providers primarily use the list of IPO proceeds, their leading position has been overtaken by technology, media, telecom, biopharmaceutical and healthcare companies. Industrial companies with core technologies have also taken up IPO financing.

Advanced manufacturing, which is expected to highlight China’s economic growth in 2023, will see more successful IPOs announced this year, Fei said. Companies that use special and sophisticated technologies to produce new and unique products, which are also in line with the country’s strategic development path, will also participate in the one-year IPO event on the Beijing Stock Exchange, which is started to grow small technologically advanced, run. and medium enterprises.

While the BSE saw 75 new companies successfully float in 2022, totaling 14.9 billion yuan in funding, Deloitte estimates that up to 120 companies will have their IPOs in 2023. report on the BSE, with total revenue reaching 24 billion yuan.

The STAR Market in Shanghai is expected to see 120 to 140 new listings in 2023, with total acquisitions estimated at between 305 billion yuan and 340 billion yuan. According to Deloitte, ChiNext may implement 150 to 170 IPOs in 2023, with revenue reaching 210 billion yuan.

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