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Depressed market for China's IPOs

By Cai Xiao | China Daily | Updated: 2013-03-29 09:21

Only 10 Chinese mainland companies were listed in the first quarter of 2013 with total financing of 6.3 billion yuan ($1.01 billion), a drop of 84 percent year-on-year, according to a report by ChinaVenture Group on Thursday.

The 10 firms all went public in Hong Kong, with one of them invested by private equity and venture capital.

With IPOs in the A-share market stagnating and those in the United States inactive, the number of Chinese companies listing in the first quarter and the finance involved were the lowest since 2009.

The average financing for an IPO for Chinese companies in the first quarter was 630 million yuan ($101 million), compared with 1.68 billion yuan the previous quarter.

The largest offering was that of Chinalco Mining Corp International, a unit of China's top aluminum group Aluminum Corp of China, listed in January with financing of 2.5 billion yuan.

No IPO was made in the A-share market this quarter because the China Securities Regulatory Commission stopped examination and approval processes and carried out strict financial verification of firms applying to go public.

Since the start of the year, 48 companies have canceled plans to be examined and approved by the commission, largely because their business performance declined amid gloomy economic conditions.

More private equity and venture capital firms chose mergers and acquisitions, making 40 exits in the first quarter and cashing out $2.64 billion, compared with $230 million in the same period last year.

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