Greater China IPO Watch 2018

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1 Greater China IPO Watch 2018 Greater China IPO Watch surveys stock market listings in Greater China and provides a comparison with the world s major markets

2 Greater China IPO Watch 2018 This Greater China IPO Watch provides an overview of the initial

including Hong Kong, Shanghai, Shenzhen and Taiwan.

2018. For comparability purposes, all figures in this report have been translated into United

Initial public offering in this publication is defined to include all share listings on a

2 2 Greater China IPO Watch 2018 This Greater China IPO Watch provides an overview of the initial public offerings (IPOs) and listing activities on Greater China s principal stock markets, including Hong Kong, Shanghai, Shenzhen and Taiwan. The analysis covers companies which were listed on these markets from 1 January to 31 December For comparability purposes, all figures in this report have been translated into United States Dollars (USD) at the applicable closing exchange rate at the end of each year. Initial public offering in this publication is defined to include all share listings on a platform where the entity s shares have not been listed previously. This report has been prepared by the mainland China/ Hong Kong Capital Market Services practice of PwC.

3 Greater China IPO Watch Introduction to the four stock markets The Hong Kong stock market consists of two separate boards: the Main Board (MB) and the GEM. The MB facilitates fund raising by companies with track records of certain minimum profit, revenue, operating cash flow and/ or market capitalisation levels as set out in the Hong Kong listing rules. The GEM focuses on companies which do not fulfil the profitability/track record requirements of the Main Board but have growth potential and a minimum level of positive operating cash flow. Companies established in mainland China (the People s Republic of China) that are listed in Hong Kong are referred to as H-share companies. Companies owned by mainland China nationals or enterprises which are listed in Hong Kong through Hong Kong or overseas incorporated holding companies are referred to as Red Chip companies. Both the Shanghai and Shenzhen Stock Exchanges consist of A-share and B-share listing platforms on which companies established in mainland China can list. The Shenzhen Stock Exchange has a Small and Medium Enterprise (SME) Board and a ChiNext Board to facilitate fund-raising of small and medium-sized enterprises and growing venture enterprises. Shanghai and Shenzhen A-share, and shares listed on SME and ChiNext can only be traded by mainland China nationals and enterprises, while B-shares can only be traded by overseas investors. National Equities Exchange and Quotation system in mainland China, which serves as a national share transfer system for SMEs to transfer shares and raise funds, is not covered within this review. The Taiwan Stock Exchange (TSEC) facilitates capital raising by companies (both Taiwan and foreign companies) with track records of certain minimum profit and capital base. Technologybased companies without track records but with a certain minimum amount of paid-in capital and projected net worth can also be listed. Most of the companies in Taiwan have to list their shares for a minimum of six months on the over-the-counter market, Emerging Stock on the Gretai Securities Market (GTSM) before listing on TSEC. This review does not include data from the GTSM.

4 4 Greater China IPO Watch 2018 Contents 6 Foreword 7 Overview of the IPO markets in Greater China 8 IPOs by stock exchange 9 IPO vs. other equity fund raising 10 IPOs by P/E multiples 12 IPOs by share price performance on the first day of listing 14 IPOs by industry sector

5 Greater China IPO Watch Turnover value and market capitalisation 16 Top ten IPOs in Greater China from 2014 to Top ten IPOs in world history 19 Top ten IPOs worldwide in Comparison with the US markets 21 Comparison with the European markets 22 Comparison with major Asian markets 23 Listed debt issued in mainland China and Hong Kong

6 Greater China IPO Watch 2018 Foreword Kennedy Liu Partner, Head of Capital Markets and Accounting Advisory Services PwC mainland China and Hong Kong The global IPO market in 2018 continued the

6 6 Greater China IPO Watch 2018 Foreword Kennedy Liu Partner, Head of Capital Markets and Accounting Advisory Services PwC mainland China and Hong Kong The global IPO market in 2018 continued the improving trend seen in the second half of 2017 as economic growth continued and volatility remained at low levels creating favourable IPO market conditions. However, this slowed towards the end of the year reflecting reduced levels of investor confidence in the capital markets due to geopolitical instability and rising interest rates. Overall IPO activity across the region grew with a 10% increase in funds raised. There was an increase in larger IPOs (>USD 1 billion), with the top 10 IPOs contributing 47% of the region s total IPO proceeds compared to 21% in This was primarily driven by an increase in the number of IPOs from the information technology and telecommunications sector in Hong Kong led the world in terms of the amount of funds raised and produced the highest number of IPOs in the region. IPO volumes increased by 25% from 2017 to USD 36.8 billion, attracting 63% of the region s funds raised with many enterprises viewing it as their first choice of fundraising platform in Asia and worldwide. A number of new economy and biotech issuers successfully completed listings in 2018 following recent rule changes which have bolstered Hong Kong s role as a regional financing platform. Changes were made to the regulatory review process for IPOs in mainland China to improve the quality of listing applicants in late This slowed momentum in the mainland China IPO market in 2018 with IPO numbers falling by 76%. Mainland regulators continue to work on developing a mechanism to allow large Chinese companies listed on overseas exchanges to issue depositary receipts in China which should provide an attractive capital raising alternative to a number of listed issuers. The long-term fundamentals in the region remain positive with GDP growth and urbanisation forecast to continue, the region s capital markets are expected to strengthen in 2018, following a period of regulatory reform and a continued pro-growth strategy by the leadership in China creating a supportive environment for IPOs. Investor demand for new issuers from Greater China is anticipated to continue as the long term fundamentals in the region remain relatively attractive compared to other major markets with GDP growth and urbanisation forecast to continue. However, the global investment backdrop remains uncertain with further interest rate rises inevitable in the medium term and geopolitical concerns remaining. This emphases the need for companies to be confident in their chosen strategy and for listing applicants to be IPO ready in order to take advantage of the continued short IPO windows.

Greater China IPO Watch 2018 7 Overview of the IPO markets in Greater China The amount of funds raised from IPOs increased by 10% from USD 52.1 billion in 2017 to USD 57.5 billion in 2018.

7 Greater China IPO Watch Overview of the IPO markets in Greater China The amount of funds raised from IPOs increased by 10% from USD 52.1 billion in 2017 to USD 57.5 billion in The number of IPOs in Greater China decreased from 631 in 2017 to 354 in 2018 reflecting an increase in average IPO sizes. The Greater China Exchanges continued to lead the world in terms of number of IPOs and funds raised. Number of IPOs from 2014 to Number of IPOs Year Amount of IPO funds raised from 2014 to 2018 USD billion Year Source: PwC Research

8 8 Greater China IPO Watch 2018 IPOs by stock exchange In aggregate, funds raised increased by 10% across the Greater China markets. IPO proceeds in Hong Kong increased by 124% from 2017 rising to USD 36.8 billion, leading the world in terms of funds raised. IPO volumes increased by over 25% in Hong Kong rising to 218 IPOs compared to 174 in 2017, whereas volumes in Shanghai and Shenzhen decreased by 76% due to changes in the regulatory approval process. Hong Kong s GEM had another strong year in terms of IPO volumes, attracting 75 new listing applicants in 2018 compared to 80 in IPO funds raised remained consistent at USD 0.7 billion. The Taiwan Stock Exchange hosted 31 IPOs raising USD 0.5 billion, compared to 21 in 2017, raising USD 0.3 billion. Funds raised in USD billion Hong Kong Main Board Hong Kong GEM Shanghai A Shenzhen SME Board Shenzhen ChiNext Taiwan 2014 No. of IPOs 103 # % of total 38.4% 7.1% 16.1% 11.6% 19.0% 7.8% 100.0% Funds raised % of total 68.4% 0.7% 12.7% 8.3% 8.3% 1.6% 100.0% Total 2015 No. of IPOs 104 # % of total 27.3% 8.9% 23.4% 11.5% 22.6% 6.3% 100.0% Funds raised % of total 57.0% 0.5% 28.4% 4.8% 8.3% 1.0% 100.0% 2016 No. of IPOs 81 # % of total 21.4% 11.9% 27.3% 12.2% 20.6% 6.6% 100.0% Funds raised % of total 52.0% 1.3% 31.1% 7.0% 7.8% 0.8% 100.0% 2017 No. of IPOs 94 # % of total 14.9% 12.7% 33.9% 12.8% 22.4% 3.3% 100.0% Funds raised % of total 30.1% 1.3% 40.7% 11.9% 15.4% 0.6% 100.0% 2018 No. of IPOs 143# % of total 40.4% 21.2% 16.1% 5.4% 8.2% 8.7% 100.0% Funds raised % of total 62.8% 1.2% 22.1% 5.7% 7.3% 0.9% 100.0% # included listing by introduction & switch from GEM to Main Board without raising funds in Hong Kong: 13 in 2014, 17 in 2015, 9 in 2016, 14 in 2017 and 13 in Source: PwC Research

9 Greater China IPO Watch IPO vs. other equity fund raising The relative proportion of funds raised from IPOs in Greater China versus total equity funds raised increased from 16% in 2017 to 26% in This was primarily due to decreases in other equity funds raised in Shenzhen, which decreased by over 53% from USD 106 billion in 2017 to USD 49.9 billion in 2018, in Hong Kong which decreased by 44% from USD 58 billion in 2017 to USD 32.7 billion in 2018, and in Shanghai, which decreased by 20% from USD 95.3 billion in 2017 to USD 76.3 billion in USD billion Year Other equity funds raised (USD billion) IPO funds raised (USD billion) Hong Kong Shanghai Shenzhen Taiwan Greater China total Amount in USD billion Amount % Amount % Amount % Amount % Amount % 2014 IPO funds raised % 5.5 9% % % % Other equity funds raised % % % % % Total equity funds raised % % % % % 2015 IPO funds raised % % 7.7 7% % % Other equity funds raised % % % % % Total equity funds raised % % % % % 2016 IPO funds raised % % 7.0 5% % % Other equity funds raised % % % % % Total equity funds raised % % % % % 2017 IPO funds raised % % % 0.3 4% % Other equity funds raised % % % % % Total equity funds raised % % % % % 2018 IPO funds raised % % % 0.5 8% % Other equity funds raised % % % % % Total equity funds raised % % % % % Source: PwC Research

10 Greater China IPO Watch 2018 IPOs by P/E multiples In 2018, P/E multiples in Greater China for IPOs increased compared to levels shown in 2017.

10 10 Greater China IPO Watch 2018 IPOs by P/E multiples In 2018, P/E multiples in Greater China for IPOs increased compared to levels shown in The percentage of IPOs offered at a P/E multiple of over 30 times was 17% in 2018 compared to 6% in P/E multiples in Hong Kong increased, with 27% of IPOs offered at P/E multiples of above 30 compared to 21% in P/E multiples in Shanghai decreased from 93% of IPOs offered at P/E multiples of above 20 in 2017 to 74% in P/E multiples in Shenzhen decreased from those shown in 2017, with approximately 90% still being offered at multiples above 20 reflecting the high growth nature of the listing companies. In Taiwan, P/E multiples decreased compared to those seen in 2017 with 66% of IPOs with a P/E less than 10 times. P/E ratio 452 Number of IPOs < >1000 N/A

11 Greater China IPO Watch P/E ratio by stock exchange 2016 Number of IPOs < >1000 N/A Hong Kong Shanghai Shenzhen Taiwan P/E ratio by stock exchange Number of IPOs < >1000 N/A Hong Kong Shanghai Shenzhen Taiwan P/E ratio by stock exchange 2018 Number of IPOs < >1000 N/A Hong Kong Shanghai Shenzhen Taiwan Source: PwC Research

12 Greater China IPO Watch 2018 IPOs by share price performance on the first day of listing Around 80% of new listings in 2018 closed their first day of trading with a price above the IPO issue price

12 12 Greater China IPO Watch 2018 IPOs by share price performance on the first day of listing Around 80% of new listings in 2018 closed their first day of trading with a price above the IPO issue price indicating continued favourable pricing for IPO investors. In 2018, 8% of IPOs enabled investors to have a first day gain of more than 50% compared to 5% in 2017, including 11% of IPOs in Hong Kong. Share price performance by year % change of first day closing price over IPO price 463 Number of IPOs % to % -10% to -0.01% to % -9.99% 0% to 9.99% 10% to 19.99% 20% to 49.99% 50% to 99.99% 100% to 200% to 300% to % % % 600% to 1000% to % % 2000% to 3000% N/A

13 Greater China IPO Watch Share price performance % change of first day closing price over IPO price by stock exchange 2016 Number of IPOs % to % -10% to -0.01% to % -9.99% 0% to 9.99% 10% to 19.99% 20% to 49.99% 50% to 99.99% 100% to % 200% to % 300% to % 600% to 1000% to % % 2000% to 3000% N/A Hong Kong Shanghai Shenzhen Taiwan Share price performance % change of first day closing price over IPO price by stock exchange Number of IPOs % to % -10% to -0.01% to % -9.99% 0% to 9.99% 10% to 19.99% 20% to 49.99% 50% to 99.99% 100% to % 200% to % 300% to % 600% to 1000% to % % 2000% to 3000% N/A Hong Kong Shanghai Shenzhen Taiwan Share price performance % change of first day closing price over IPO price by stock exchange 2018 Number of IPOs % to % -10% to -0.01% to % -9.99% 0% to 9.99% 10% to 19.99% 20% to 49.99% 50% to 99.99% 100% to % 200% to % 300% to % 600% to 1000% to % % 2000% to 3000% N/A Hong Kong Shanghai Shenzhen Taiwan Source: PwC Research

14 14 Greater China IPO Watch 2018 IPOs by industry sector Most of the IPO candidates in Greater China are from the retail, consumer goods and services sector, which represented 37%, 40% and 46% of the total number of IPOs in 2016, 2017 and 2018 respectively. There was an increase in the relative proportion of applicants from the information technology and telecommunication sector from 10% in 2017 to 15% in This was accompanied by a significant increase in the relative proportion of funds raised from the information technology and telecommunication sector, from 7% in 2017 to 36% in 2018 reflecting a number of sizeable IPOs, and overtaking the retail, consumer goods and services sector to become the region s primary sector for fundraising. There was also an increase in the relative proportion of applicants from the financial sector, from 5% in 2017 to 13% in 2018 and a decrease from the industrial sector from 41% in 2017 to 21% in This was offset by a reduction in the relative proportion of funds raised in the industrial sector, which fell from 28% in 2017 to 8% in Number of IPOs by industry sector 4% 4% 5% 9% 5% 10% 13% 37% 2016 Total number of IPOs: % 40% 2017 Total number of IPOs: % 2018 Total number of IPOs: % 37% 41% 21% Funds raised by industry sector 2% 4% 3% 28% 21% 19% % % % Total IPO funds raised: USD 47.3 billion 6% 48% Total IPO funds raised: USD 52.1 billion 28% 7% 8% Total IPO funds raised: USD 57.5 billion 36% Energy & utilities Financials Information technology & telecommunications Industrials Retail, consumer goods & services Source: PwC Research

15 Greater China IPO Watch Turnover value and market capitalisation The market capitalisation of the Greater China capital markets reverted to 2017 levels with a 5% net increase in the number of listed companies. The turnover value of the Greater China capital markets decreased from 2017 levels. This was primarily driven by decreases of 25% in Shanghai and 23% in Shenzhen offset by a 21% increase in Hong Kong. Turnover in the Greater China capital markets for 2018 was 157% of its closing market capitalisation in 2018 (2017: 148%); while it was 70% (2017: 52%) in the United Kingdom and 119% (2017: 81%) in the United States. Market data as of 31 Dec (Amount in USD billion) Stock Exchange Number of listed companies Turnover value Market capitalisation Number of listed companies Turnover value Market capitalisation Number of listed companies Turnover value Market capitalisation Hong Kong Main Board Hong Kong GEM 1,713 2, , ,794 2, , ,926 3, , Shanghai A 1,175 7, , ,389 7, , ,443 5, ,906.2 Shanghai B Shenzhen A* 1,859 11, , ,078 9, , ,124 7, ,396.7 Shenzhen B Taiwan , Total 5,999 20, , ,592 20, , ,909 17, ,101.0 * include Shenzhen SME Board and Shenzhen ChiNext Source: PwC Research

16 16 Greater China IPO Watch 2018 Top ten IPOs in Greater China from 2014 to 2018 The top ten IPOs in Greater China accounted for 47% of the total funds from IPOs in 2018 (2017: 21%). Over the last five years, Hong Kong and Shanghai have consistently hosted the largest IPOs in Greater China. The ability of these two markets to absorb large IPOs demonstrates the significant capital pool available in Greater China. In 2018, 7 IPOs each raised over USD 1 billion, compared to 5 in 2017 and 10 in Average deal sizes of the top ten IPOs increased from USD 1.1 billion in 2017 to USD 2.7 billion in Hong Kong again led the way for larger IPOs, notably in the information technology and telecommunications sector Company Funds raised (USD million) Stock Exchange Dalian Wanda Commercial Properties Co Ltd 4,039 Hong Kong CGN Power Co Ltd 3,638 Hong Kong HK Electric Investments Ltd 3,111 Hong Kong WH Group Ltd 2,360 Hong Kong BAIC Motor Corporation Ltd 1,532 Hong Kong Shengjing Bank Co Ltd 1,502 Hong Kong China CNR Corporation Ltd 1,293 Hong Kong Harbin Bank Co Ltd 1,131 Hong Kong Guosen Securities Co Ltd 1,127 Shenzhen SME Luye Pharma Group Ltd 878 Hong Kong Total 20,611 (48%) 2015 Company Funds raised (USD million) Stock Exchange HTSC 5,000 Hong Kong Guotai Junan Securities Co Ltd 4,633 Shanghai GF Securities Co Ltd 4,139 Hong Kong China Huarong Asset Management Co Ltd 2,541 Hong Kong China Reinsurance (Group) Corporation 2,115 Hong Kong China National Nuclear Power Co Ltd 2,033 Shanghai Legend Holdings Corporation 1,975 Hong Kong China Energy Engineering Corporation Ltd 1,900 Hong Kong Orient Securities Co Ltd 1,546 Shanghai China Railway Signal & Communication Corporation Ltd 1,455 Hong Kong Total 27,337 (46%)

17 Greater China IPO Watch Company Funds raised (USD million) Stock Exchange Postal Savings Bank of China Co Ltd 7,629 Hong Kong China Resources Pharmaceutical Group Ltd 1,942 Hong Kong China Zheshang Bank Co Ltd 1,938 Hong Kong Bank of Shanghai Co Ltd 1,537 Shanghai China Merchants Securities Co Ltd 1,379 Hong Kong Everbright Securities Co Ltd 1,151 Hong Kong BOC Aviation Ltd 1,128 Hong Kong DFZQ 1,080 Hong Kong CSC Financial Co Ltd 1,057 Hong Kong Bank of Jiangsu Co Ltd 1,042 Shanghai Total 19,883 (42%) 2017 Company Funds raised (USD million) Stock Exchange Guotai Junan Securities Co Ltd 2,207 Hong Kong Zhongan Online P & C Insurance Co Ltd 1,750 Hong Kong China Literature Ltd 1,225 Hong Kong Zhongyuan Bank Co Ltd 1,190 Hong Kong Guangzhou Rural Commercial Bank Co Ltd 1,188 Hong Kong Yixin Group Ltd 866 Hong Kong China Galaxy Securities Co.,Ltd. 628 Shanghai Caitong Securities Co.,Ltd. 628 Shanghai Razer Inc 607 Hong Kong Huaneng Lancang River Hydropower Inc. 600 Shanghai Total 10,889 (21%) 2018 Company Funds raised (USD million) Stock Exchange China Tower Corporation Ltd 7,507 Hong Kong Xiaomi Corporation 5,441 Hong Kong Meituan Dianping 4,232 Hong Kong Foxconn Industrial Internet Co., Ltd. 3,943 Shanghai Ping An Healthcare and Technology Co Ltd 1,120 Hong Kong Jiangxi Bank Co Ltd 1,098 Hong Kong WuXi AppTec Co Ltd 1,057 Hong Kong Haidilao International Holding Ltd 965 Hong Kong BeiGene Ltd 905 Hong Kong The People's Insurance Company (Group) of China Limited 874 Shanghai Total 27,142 (47%) Source: PwC Research

18 18 Greater China IPO Watch 2018 Top ten IPOs in world history The top four IPOs in world history are based in mainland China/Hong Kong. Greater China stock exchanges account for three out of the top ten IPOs in world history. In 2014, Alibaba Group, the China-based e-commerce business, completed an IPO on the New York Stock Exchange raising USD 25 billion, the largest IPO recorded, surpassing the IPO of Agricultural Bank of China Limited in 2010 which raised a total of USD 22.4 billion. The IPO of Industrial and Commercial Bank of China Ltd is the third largest IPO in world history, raising USD 22 billion in In 2018, Softbank Corp raised USD 21.1 billion in Japan. Rank Listing year Company Stock Exchange Country USD million Alibaba Group Holding Ltd New York Stock Exchange China 25, Agricultural Bank of China Ltd Hong Kong Stock Exchange & Shanghai Stock Exchange Industrial and Commercial Bank of China Ltd Hong Kong Stock Exchange & Shanghai Stock Exchange China 22,430 China 22, Softbank Corp Tokyo Stock Exchange Japan 21, AIA Group Ltd Hong Kong Stock Exchange China (Hong Kong) 20, VISA Inc New York Stock Exchange United States 19, NTT Mobile Communications Network Inc Tokyo Stock Exchange Japan 18, General Motors Co Ltd New York Stock Exchange United States 18, Ente Nazionale per I'Energia Elettrica Milan Stock Exchange Italy 17, Facebook Inc Nasdaq Stock Exchange United States 16,007 Source: Thomson Financial

19 Greater China IPO Watch Top ten IPOs worldwide in 2018 Four of the top ten IPOs in the world in 2018 were from Greater China, compared to one in Rank Listing month Company Stock Exchange Country USD million 1 December Softbank Corporation Tokyo Stock Exchange Japan 21,140 2 August China Tower Corporation Ltd Hong Kong Stock Exchange China 7,507 3 July Xiaomi Corporation Hong Kong Stock Exchange China 5,441 4 March Siemens Healthineers Ag Frankfurt Stock Exchange Germany 5,168 5 October Knorr-Bremse AG Frankfurt Stock Exchange Germany 4,432 6 September Meituan Dianping Hong Kong Stock Exchange China 4,232 7 June Foxconn Industrial Internet Co., Ltd. Shanghai Stock Exchange China 3,943 8 May AXA Equitable Holdings Inc New York Stock Exchange United States 3,157 9 January Pagseguro Digital Ltd. New York Stock Exchange United States 2, March iqiyi Inc Nasdaq Stock Exchange United States 2,424 Source: Thomson Financial

20 20 Greater China IPO Watch 2018 Comparison with the US markets The amount of IPO funds raised in the US markets (NYSE and Nasdaq) increased by 23% from USD 44.4 billion in 2017 to USD 54.7 billion in 2018, with a 22% increase in IPO volumes. The average deal size in the US was USD 0.23 billion, consistent with that seen in The average deal size in Greater China was USD 0.16 billion in 2018 which is double the USD 0.08 billion seen in Value of equity trading 20,978 20,867 17,452 16,790 USD billion 11,071 11,336 17,318 14,535 19,341 The value of equity trading in Greater China decreased from 2017 levels to around USD 17,452 billion. The value of equity trading in the US increased by 40% to USD 36,131 billion in 2018 compared to USD 25,871 billion in Greater China Nasdaq NYSE Source: World Federation of Exchange website (Amount in USD billion) Stock Exchange Number of IPOs Funds raised Average deal size Number of IPOs Funds raised Average deal size Number of IPOs Funds raised Average deal size Hong Kong Shanghai Shenzhen Taiwan Greater China total Nasdaq NYSE Nasdaq + NYSE total Source: PwC Research

21 Greater China IPO Watch Comparison with the European markets The IPO markets in Europe (including exchanges in the EU member countries plus Switzerland and Norway) decreased 10% by volume and 20% by funds raised in USD terms. In 2018, the average deal size in Europe decreased from USD 0.15 billion in 2017 to USD 0.13 billion in In 2018, USD 57.5 billion of IPO funds were raised in Greater China by 354 IPOs, representing an average deal size of USD 0.16 billion, comparable with that seen in Europe. Value of equity trading 20,978 20,867 17,452 USD billion 12,603 10,653 11,290 The value of equity trading in Europe increased by 12% from USD 11,290 billion in 2017 to USD 12,603 billion in Greater China Europe Source: PwC Research (Amount in USD billion) Stock Exchange Number of IPOs Funds raised Average deal size Number of IPOs Funds raised Average deal size Number of IPOs Funds raised Average deal size Hong Kong Shanghai Shenzhen Taiwan Greater China total London (Main Board) London (AIM, SFM, PSM ) London total Europe total Source: PwC Research

22 22 Greater China IPO Watch 2018 Comparison with major Asian markets The number of IPOs in Japan remained consistent with 2017 at 93. The IPO funds raised in Japan increased from USD 6 billion in 2017 to USD 29.4 billion in 2018, primarily due to the IPO of Softbank Corp which raised USD 21.1 billion alone. The number of IPOs in Singapore (including Main Board and Catalist) also remained at 2017 levels with 15 IPOs raising USD 0.5 billion in Australia experienced a 14% decrease in IPO volumes from 114 in 2017 to 98 in 2018 despite a 30% increase in funds raised reflecting an increase in more sizeable IPOs. Malaysia continued its development as a capital market with IPO numbers increasing by 70% to 22 in 2018 with a decrease in IPO proceeds from USD 1.7 billion in 2017 to USD 0.1 billion in 2018 due to an absence of larger IPOs. (Amount in USD billion) Stock Exchange Number of IPOs Funds raised Average deal size Number of IPOs Funds raised Average deal size Number of IPOs Funds raised Average deal size Hong Kong Shanghai Shenzhen Taiwan Greater China total Japan Exchange Group (Tokyo and Osaka)* Sapporo Securities Exchange Nagoya Stock Exchange Fukuoka Stock Exchange Japan total^ Main Board Catalist Singapore total Malaysia Australia * include J-REIT ^ the offering value includes global offering Source: PwC Research

23 Greater China IPO Watch Listed debt issued in mainland China and Hong Kong Mainland China The Mainland China debt market primarily comprises bonds listed on stock exchanges or the inter-bank market. In 2018, the number of issues increased by 28% compared to 2017 with a 17% increase in amounts raised. This reflects a rising interest rate environment and a policy focus on reducing leverage at domestic institutions. The People s Bank of China continues to promote open access to certain foreign corporates, financial institutions and sovereign entities to the interbank debt market to issue RMBdenominated bonds (so called Panda bonds) in mainland China. Hong Kong Hong Kong is a liberal debt market where international investors are free to invest in debt instruments and there are no restrictions on foreign borrowers. The bond market in Hong Kong has for some time been a significant market place for issuers and investors, in both domestic and foreign currencies. The range of product offerings, the open access for issuers and investors, both domestic and international, and the increasing significance of offshore RMB bond issuances make Hong Kong one of the most frequented international bond markets in Asia. Issuers can select whether they wish to list instruments on the Hong Kong Stock Exchange or issue privately where trading occurs outside stock exchange. Generally, larger issues tend to be completed via a listing. However, a significant number of issuers continue to issue private debt securities which are not listed on an exchange. There was a 4% decrease in the volume of listed debt issues in Hong Kong in 2018 with a 12% decrease in funds raised reflecting smaller issue sizes compared to Bond issued in mainland China 6,845 6,906 5,388 1, ,455 1, Bond issued in Hong Kong Number Amount raised (USD billion) Source: HKEx, Thomson and Wind

24 24 Greater China IPO Watch 2018 Capital Market Services practice The Capital Market Services practice is part of the Assurance practice of PwC. It is comprised of a core team of specialists who provide a broad range of services to companies and/or investment banks in connection with all aspects of capital market transactions. These include preparation for becoming a public listed company, selecting the right market and advisory team, advising on group restructuring, accounting and regulatory issues, and acting as reporting accountants. The mainland China/Hong Kong Capital Market Services practice is part of the PwC global network of capital markets specialists.. Mainland China/Hong Kong Capital Market Services practice partners and directors: Kennedy Liu kennedy.liu@hk.pwc.com Edmond Chan edmond.chan@hk.pwc.com Rayon Chu +86(755) rayon.wh.chu@cn.pwc.com Pauline Leung pauline.pw.leung@hk.pwc.com Xuemei Li +86(10) xuemei.li@cn.pwc.com Thomas Lo thomas.lo@hk.pwc.com Jie Shen +86 (21) jie.shen@cn.pwc.com Eddie Wong eddie.kc.wong@hk.pwc.com Doris Tu +86(10) doris.y.tu@cn.pwc.com Fanny Yang +86 (21) fanny.yang@cn.pwc.com George Yuen +86(10) george.yuen@cn.pwc.com Rita Chan rita.chan@hk.pwc.com Geoffrey Tang geoffrey.tang@hk.pwc.com About PwC For more information, please visit: or About PwC Globally At PwC, our purpose is to build trust in society and solve important problems. We re a network of firms in 158 countries with more than 236,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see for further details. PwC Mainland China, Hong Kong, Taiwan and Macau PwC China, Hong Kong, Taiwan and Macau work together on a collaborative basis, subject to local applicable laws. Collectively, we have around 720 partners and over 20,000 people in total. We provide organisations with the professional service they need, wherever they may be located. Our highly qualified, experienced professionals listen to different points of view to help organisations solve their business issues and identify and maximise the opportunities they seek. Our industry specialisation allows us to help co-create solutions with our clients for their sector of interest.

25 Greater China IPO Watch We are located in these cities: Beijing, Shanghai, Hong Kong, Shenyang, Tianjin, Dalian, Jinan, Qingdao, Zhengzhou, Xi an, Nanjing, Hefei, Suzhou, Wuhan, Chengdu, Hangzhou, Ningbo, Chongqing, Changsha, Kunming, Xiamen, Guangzhou, Shenzhen, Macau, Haikou, Taipei, Chungli, Hsinchu, Taichung, Tainan and Kaohsiung. About Greater China IPO Watch Greater China IPO Watch surveys all new listings on Greater China s principal stock markets and market segments. All of the graphs, tables, and data used within this publication have been collated or extracted by the Capital Market Services practice research team. In collating and extracting this information, we rely upon data provided directly by various exchanges, and extracted from the World Federation of Exchanges website. We do not carry out any confirmation procedures on that information. How can PwC help? Going public is a major challenge for any company and there are many decisions that will need to be taken prior to an IPO. Management will need to steer the company through a complicated and often time-consuming process in order to be ready for an IPO. Planning and good preparation are crucial for a successful flotation. It s not simply a question of appointing advisors but about ensuring that the company is ready to be listed on the public markets and that it is able to meet the challenges that such a listing brings. If you are planning on listing, there will be many questions you will want to ask. These are just some of the questions we will be able to help you find answers to: What is an appropriate valuation for my business? What does being a public company really mean? How long will it take to complete an IPO? Do we have the right resources? Are my people ready? How to implement a stock based compensation plan? Do we have an attractive story for potential investors? What is the best way to articulate our strategy? What are the corporate governance issues we need to address? What are the internal control procedures we need to implement? How many non-affiliated/independence directors should we have on the board? What are the implications of a concurrent offering of shares to sophisticated investors in the US (via 144A) or elsewhere (via Reg S)? How do our accounting policies compare with other companies in the sector? Is my finance function ready? Are my operations run and managed effectively? What additional disclosures will we need to provide as a public company? Will it be a problem if one of our subsidiaries has a modified audit opinion? Do we need to restate our track record for recent acquisitions and disposals? How will an IPO affect our existing incentive arrangements? Any other possible listing venues?

26 2019 PricewaterhouseCoopers Limited. All rights reserved. PwC refers to the Hong Kong member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. HK C1

Greater China IPO Watch 2017

Greater China IPO Watch 2017 Greater China IPO Watch surveys stock market listings in Greater China and provides a comparison with the world s major markets Greater China IPO Watch 217 This Greater China IPO Watch provides an overview