Chinese technology companies lead the number of global IPOs in Q1 2015

Eight Chinese tech listings reported to have earned US$1.1 billion in proceeds

Hong Kong, 21 May 2015 - In Q1 2015, Chinese technology IPOs maintained its leading position globally in terms of volume, with eight listings earningUS$1.1 billion in proceeds. However, the number of Chinese tech IPOs declined by 27% and total proceeds fell by 26%, according to PwC’s Global Technology IPO Review Q1 2015.

 

The number of Chinese tech IPOs in Q1 2015 was lower compared with Q1 2014, which recorded 11 IPOs with a total of US$987 million raised. However, average proceeds increased from US$89.7 million per IPO in Q1 2014 to US$131.9 million in Q1 2015. 

 

In Q1 2015, all the Chinese tech companies chose to list on Chinese exchanges. The Chinese regulator’s shift from an approval-based to a registration-based system for IPO listings is believed to have simplified the IPO process and enhanced the attractiveness of going public in China.

“While there are a number of Chinese technology companies in the US IPO pipeline, we anticipate significant growth in technology listings on domestic exchanges as a result of both the new registration based system and increase in valuations," says Jianbin Gao, Technology Industry Leader, PwC China.

The most noticeable development for China tech IPOs in the first quarter was the absence of cross-border listings. Given the shift in Chinese regulatory policy, there may be a slowing in the pace of cross-border deals. The three cross-border listings in Q1 2015 were from Sweden, Israel and South Korea. They listed on FirstNotStock (a NASDAQ sub-exchange), NASDAQ Global Select and the Hong Kong Stock Exchange respectively.

On a global level, technology IPOs maintained a healthy pace in Q1 2015 after 2014 recorded the best year of the decade for tech listings. There were 23 tech IPOs and total proceeds of US$6.1 billion globally. The top ten listings were split evenly between China, the US and Europe, with three each, and one from South Korea. Globally, total Q1 2015 proceeds declined by 11% and the number of tech IPOs dropped by 12% compared to Q1 2014.

 

In terms of global sectors, the Internet Software & Services subsector again dominated the top ten technology IPOs , accounting for 64% (US$3.2 billion) of proceeds and 40% (4) of the top 10 IPOs in Q1 2015. Computers, Storage & Peripherals followed in second place with 24% of the top 10 proceeds and 30% of the top 10 IPOs. 

“2015 started on a promising note, with China contributing a significant number of tech IPOs," says Mr Gao. "Looking forward, although we’re experiencing a slowdown in Q1 2015 for Chinese companies, I anticipate the total growth for 2015 will surpass that of 2014.”