(Yicai Global) Sept. 30 -- A number of Chinese mainland companies have scrapped plans to go public in Hong Kong, as the funds raised through initial public offerings in the first half and the subsequent performance of newly listed stocks have been sobering.

The Hong Kong Stock Exchange hosted just 26 IPOs in the six months ended June 30, versus 46 a year earlier, and the total amount raised plunged 91 percent to HKD19.7 billion (USD2.5 billion), the lowest in five years. The number of firms banking more than USD100 million halved to 11.

Even the bourse’s biggest fundraiser so far this year, China Vanke's property management unit Onewo [HKG: 2602], has plunged 6 percent since its shares debuted yesterday.

As of last month, nearly 50 companies had completed IPOs in Hong Kong, with more than 80 percent having fallen below their offer price, according to Li Mingjin, a senior consultant at investment advisor Jufeng.

Having ditched the idea of listing in Kong Kong, one biomedicine firm is now preparing to go public on the Star Market, Shanghai’s Nasdaq-like trading venue, its founder told Yicai Global. It gave up on Hong Kong as “the money that could have been raised there was too little.”

“The biomedicine sector hasn't done well this year, especially on the Hong Kong exchange, with high valuations rare for IPOs of firms in this sector," said Ding Zhenyu, a senior consultant at Jufeng. “Valuations are higher in the Chinese mainland market, as policymakers encourage the listings of such firms, making it common for them to switch target to Star Market.”

The Star Market was the world leader for IPOs in the the first nine months of the year, with 93 listings raising a total of USD25.26 billion, according to Refinitiv data. Shenzhen’s ChiNext board was second, with 117 firms banking USD20.54 billion.

Some Chinese businesses may also choose to follow electric carmaker Nio to list in Singapore, Loh Boon Chye, chief executive of the Singapore Exchange, recently told reporters.

The SEX and New York Stock Exchange jointly announced on July 22 that they had signed a memorandum of understanding on the dual listing of stocks. But industry insiders do not anticipate New York replacing Hong Kong.

“The Hong Kong exchange is still the leading bourse in the Asian financial market by turnover and liquidity,” Jenny Zeng, founder of MSA Capital, told Yicai Global. “No other bourse can compete with it.”

According to industry insiders, the Hong Kong bourse is showing positive signs. Some 48 companies have gone public on there since August, Li said, adding that the market's attractiveness to investors has not waned, as China Tourism Group Duty Free raised USD2.1 billion in its IPO last month, the most in Asia that month.

The bourse may recover in the second half, as the introduction of supporting measures, including the easing of secondary listing thresholds and increased acceptance of dual primary listings, will help further absorb high-quality mainland firms and boost investor confidence, an Hong Kong-focused investor said.

Hong Kong was the world’s fourth-biggest for IPOs in the first nine months, according to Refinitiv data, with 47 companies raising a collective USD8.8 billion.

Yicai Global reported previously that the exchange was looking at lowering the revenue threshold for tech IPOs to help firms in various fields, from artificial intelligence and chips to autonomous vehicles and smart manufacturing, meet listing requirements. It plans to finalize the new measure by year-end.

Editors: Liao Shumin, Futura Costaglione