Deloitte Expects Up to 110 IPOs on Shanghai's New Innovation Board This Year
Xu Wei
DATE:  Apr 04 2019
/ SOURCE:  yicai
Deloitte Expects Up to 110 IPOs on Shanghai's New Innovation Board This Year Deloitte Expects Up to 110 IPOs on Shanghai's New Innovation Board This Year

(Yicai Global) April 4 -- Between 90 and 110 companies will succeed in listing on Shanghai Stock Exchange's new science and technology innovation board this year, according to Deloitte Touche Tohmatsu, the world's largest professional services firm.

These firms' public offerings will also change the average price-earnings ratio of 23, which has remained the same for many years, the New York-based firm said at a press briefing on April 2. It believes companies will start listing on the board in the second quarter.

The board will need about 40 to 50 firms to start and then add 15 to 20 new listings each quarter, said Hu Ke, a partner at Deloitte China.

Pre-initial public offering valuations, pricing and subscriptions of these new economy companies, and post-IPO trades, will all greatly influence future listings of new economy companies in Hong Kong and the United States, he added. Mainland-listed shares have always enjoyed good valuations, and the value of the entire market will hopefully rise during early operation of the new board, Hu said.

But the disparity between valuations on the Chinese mainland and in Hong Kong will gradually shrink as more firms list on the new sci-tech board and investors become more familiar with it, he continued. Potential share issuers will eventually decide where to list based on strategic plans for business growth and target investors.

Given the board's three-month review period for applications on the innovation board, the earliest listing results will come out around the middle of June, Hu explained, adding that the first batch of IPOs will probably take place in early July and many of the companies will be migrating from the National Equities Exchange and Quotations, China's over-the-counter exchange known as The New Third Board.

Deloitte expects between 110 and 150 companies will list in Shanghai and Shenzhen this year, including the sci-tech board and Shenzhen's ChiNext board for emerging companies, raising between CNY140 billion (USD21 billion) and CNY170 billion.

Editor: James Boynton

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Keywords:   Deloitte,IPO,Shanghai Stock Exchange