Greater China embraces strong IPO activity

Transcription

1 Greater China embraces strong IPO activity HSI reached record high, Hong Kong surged in the number of IPOs Continued destocking, normalized IPOs in A-share market 26 June 2017 Page0

2 Global IPO market review in 1H 2017 Page1

3 NYSE ranked first by funds raised, Greater China led by number of IPOs Globally, there were 772 IPOs raising USD83.4 billion in 1H In terms of the number of IPOs, the stock exchanges in mainland China and Hong Kong have secured the top three positions, with 246 and 69 IPOs respectively. New York was the top IPO fundraising exchange in 1H Snap Inc, a social media company, went public at the NYSE, raising USD3.91 billion and became the world s largest IPO in 1H Ranking of main stock exchanges around the world (1H 2017 vs 1H 2016)* New York (NYSE) Shanghai (SSE) Shenzhen (SZSE and Hong Kong (HKEx) and GEM Korea (KRX) and KOSDAQ Bolsade Madrid and MAB London Main Market and Shenzhen (SZSE and Shanghai (SSE) Hong Kong (HKEx) and GEM Australia (ASX) New York (NYSE) 1H 2017 NASDAQ Others $4.2 $3.9 $3.2 $ $7.1 $ $ $18.9 Total funds raised(usd billion)** $25.1 Number of IPOs** Hong Kong (HKEx) and GEM NASDAQ OMX New York (NYSE) London Main Market and AIM Euronext + Alternext Shenzhen (SZSE and Chinext) Tokyo, MOTHERS and JASDAQ 1H 2016 NASDAQ NASDAQ OMX 44 London Main Market and AIM 33 Tokyo, MOTHERS and 38 NASDAQ OMX 32 NASDAQ 36 NASDAQ 30 Others 250 Others 177 *Data is based on the places at which the stock exchanges locate without considering the places at which the listed companies locate. Pan-European Stock Exchange includes stock exchanges in Amsterdam, Paris, Brussels and Lisbon; Shenzhen Stock Exchange includes SME and ChiNext. Sources: Dealogic, EY statistics *Data in 2017 is based on priced IPOs as of 17 June 2017 and expected IPOs by the end of June. Others Tokyo, MOTHERS and JASDAQ Hong Kong (HKEx) and GEM Australia (ASX) Shenzhen (SZSE and Chinext) Bombay (BSE) and SME $3.2 $2.5 $2.4 $ $4.2 $ $5.6 $5.3 $14.7 Page2

4 Greater China s IPO activities review in 1H 2017 Page3

5 IPOs on HKEX gained strength, A-share endured volatility Trends of major Hong Kong and A-share indices in 1H 2017 Shanghai Composite Index Shenzhen Component Index GEM Index Hang Seng Index Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Hong Kong stocks embraced a wave of growth, led by the strong US stocks and the increased inflow of capital from mainland China through the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs. The depressed price of Hong Kong stocks has led to an increase of capital inflows which became the driver of the growth momentum Sources: EY statistics, Wind Information In 1Q, as China s economic growth rate rebounded, mainland China and Hong Kong stock markets rose steadily As the Fed s interest rate hike in March was widely expected, there were no significant effects on the stock markets Mainland China s economic growth rate has slowed down since April and the one bank and three commissions have strengthened their financial regulations. The A-share market was affected by the tightened liquidity resulting from financial deleveraging. However, Hong Kong stock market remained strong since 1Q Financial liquidity in the capital market was under pressure since the Fed s interest rate hike in June. But as IPOs slowed down and its approval became more stringent after CSRC tightened the rules on stock sales for listed companies, A-share index rebounded slightly Page4

6 A-share: IPOs for inventory reduction 246 companies are expected to go public on the A-share market in 1H 2017, raising RMB125.6 billion, increasing 303% and 336% year-onyear by number and funds raised respectively. In 1H 2017, IPOs accelerated widely and destocking stepped up. The number of companies to go public, which have been approved by CSRC, has reduced to 585, down 20% from the end of last year. 1H 2016 vs 1H 2017 No. of IPOs RMB billion Total funds raised 1H H H H SSE SME ChiNext Sources: EY Statistics, eastmoney.com *Data after 25 June 2017 is estimated based on the prospectuses and public data SSE SME ChiNext Page5

7 A-share: regulate the speed of IPOs and stabilize market confidence In 2Q 2017, the capital market moved downward and IPOs slowed down slightly, down 20% from 1Q by funds raised The overall approval time for IPOs was shortened and more predictable Number of monthly approval documents for IPOs and trend of Shanghai Composite Index in 1H 2017 Average interval between IPO approved by listing committee and approval for companies in 1H Jan Feb Mar Apr May June Jan Feb Mar Apr May June Number of approved companies for IPOs Number of companies for IPOs SCI Sources: EY statistics, CSRC *Data as of 25 June 2017 Page6

8 A-share: rejection rate of IPOs increased and approval remained strict In the first half of 2017, IPO approvals became more stringent and the rejection rate of IPOs increased to 14% from 7% last year. Result of IPO approval meeting 7% 14% 93% 86% H 2017 Pass Reject Sources: EY statistics, CSRC *Data as of 25 June 2017 Page7

9 A-share: IPO returns decreased year-on-year but led other markets In 1H 2017, the first-day return of all IPOs reached the highest growth rate of 44%. With the normalization and acceleration of IPO issuance, IPOs are no longer in scarce supply. The average number of days that new shares hit their price ceilings has decreased. On 23 June 2017, the average return rate of A-share IPOs reached 153%, leading other markets significantly. Average return of A-share in 1H 2016 and 1H % Average return of three markets in 1H % 17% 14% 285% 165% 203% 332% 137% A-Share Hong Kong US Average number of days that IPOs hit their price ceilings SME ChiNext SSE Main Board H2016 1H2017 Jan,2017 Feb,2017 Mar,2017 Apr,2017 May,2017 June,2017 Sources: EY statistics, Wind Information *Data as of 25 June 2017 GMT+8, average return rate is calculated based on closing price on 23 June Page8

10 A-share: back door listings decreased The regulators strict control to curb speculation and the implementation of measures to reduce the number of IPO applications have reduced the number of back door listings in the A-share IPO market. In 1H 2017, the number of back door listings was only four, compared to 12 in the same period last year. Number of backdoor listings H2017 Total funds raised (million) 39 Number of deals , , , , , H 2017 Sources: EY statistics, Wind Information *Data as of 25 June 2017 GMT+8 Page9

11 A-share: funds raised from the top 10 IPOs decreased due to the lack of large bank IPOs Funds raised from the top 10 IPOs totaled RMB22.8 billion, down 53% as compared with those of the top 10 IPOs in the previous year. Funds raised in each IPO were all no more than RMB5 billion. There have been no large bank IPOs during 1H 2017; the top 10 IPOs were all from the securities industry. Consumer products & retail industry saw more IPOs this year, funds raised accounting for 27% of the total funds raised of the top 10 IPOs. Top 10 IPOs in 1H 2017 by industry RMB million China Galaxy Securities Zheshang Securities Central China Securities Jiangsu Provincial Agricultural Reclamation and Development 1H 2017 A-share top 10 IPOs Oppein Home Xinfengming 2,423 2,079 2,062 2,817 2,800 4,086 17% Financials Zhejiang Jihua 1,720 7% 7% 43% Consumer products and services Transportations Yealink Network Technology Guangzhou Port 1,655 1,600 27% TMT Materials Qingdao Liqun Department Store Group 1,552 Sources: EY statistics, eastmoney.com, Wind Information *Data after 25 June 2017 was estimated based on prospectus and public data Page10

12 A-share: industrials achieved highest number of IPOs while financial IPOs narrowed 79 Top five industries by number of IPOs Industrial enterprises ranked first in terms of the number of IPOs and the funds raised. Sources: EY statistics, eastmoney.com *Data after 25 June 2017 is estimated based on the prospectuses and public data Page Industrials TMT Materials Retail, consumer products and services RMB m 33,956 Industrials Top five industries by funds raised 27,687 Retail, consumer products and services 40 20,696 20, Health 10,493 Materials TMT Financials The central bank and four other departments jointly issued the Guiding Opinions on Financial Support for the Development of China into a Manufacturing Power, proposing to enhance fund support for the transformation and upgrading of manufacturing industry and to help leading manufacturing enterprises go public. Financial industry ranked fifth in terms of funds raised due to a lack of large IPOs, especially those of banks. Analysis

13 A-share: gradual adjustments to promote capital market reform Registration system was not addressed in the second reading of Securities Law. The IPO has been normalized and rigorously reviewed to ensure that high-quality companies are supported by the capital market. Regulate the refinancing of listed companies and the stock selling of major shareholders Revise and improve the administration of the withdrawal of IPO approvers from performing duties Strengthen cash dividend supervision and impose heavy penalties for third-party violations of rules Page12

14 Hong Kong: IPO activity supported by bull market Hong Kong market saw 69 IPOs in 1H 2017, raising a total of HKD53.8 billion. The number of IPOs and funds raised increased by 82% and 24% respectively year-on-year. In 1H 2017, the Hang Seng Index repeatedly hit new highs, opening windows for new shares. Number of IPOs 1H 2016 vs 1H 2017 HKD billion Total funds raised 1H H H H Mainboard GEM Mainboard GEM Sources: EY statistics, HKEX *Data after 25 June 2017 is estimated based on the prospectuses and public data Page 13

15 Hong Kong: lead global stock market Hong Kong stock market grew about 17% since the beginning of 2017, ranked first among the major markets around the world. The recovering fundamentals of emerging economies, low valuation of stocks in the Hong Kong market and the increased capital inflows from mainland China through the Shanghai- Hong Kong and Shenzhen-Hong Kong Stock Connect programs have driven growth in the Hong Kong market. Growth of the world s major markets since the beginning of % 16.68% 8.26% 8.91% 10.91% 1.75% 1.86% 3.94% 5.33% Shanghai Composite Index SZSE Component Index FTSE 100 Nikkei 225 Dow Jones Industrial Average S&P 500 DAX Index NASDAQ index Hang Seng Index Sources: EY statistics, Wind Information *Data as of 25 June 2017 GMT+8, average return rate is calculated based on closing price on 23 June Page 14

16 Hong Kong: GEM IPOs exceeded Main Board IPOs in number for the first time since 2003 In 1H 2017, GEM listing activities remained active with the number of IPOs exceeding that of the Main Board for the first time since In January 2017, 10 companies were listed on GEM, while in early February, the number dropped as the SFC tightened GEM listing. The top three GEM IPO industries were consumer products & retail, TMT and construction & infrastructure; 86% of the companies listed on GEM were local companies. Proportions of GEM IPOs and Main Board IPOs 60% 49% 69% 84% 90% 98% 93% 92% 93% 84% 80% 76% 83% 72% 62% 40% 51% 31% 16% 10% 3% 7% 8% 7% 16% 20% 24% 17% 28% 38% H 2017 GEM Mainboard 1H 2017 IPO industry analysis Other 34% TMT 20% Construction 17% Retail and consumer products 29% 10 1H 2017 GEM IPO monthly analysis January February March April May June 1H 2017 IPO geographic analysis Other, 3% Total funds raised (HK$ m) Hong Kong, 86% 7 No. of IPOs 5 Mainland China, 11% 4 Sources: EY statistics, HKEX *Data after 25 June 2017 is estimated based on the prospectuses and public data Page 15

17 Hong Kong: increased SME listings increased, the reform of GEM is coming After 10 years of downturn, the Hong Kong GEM has been on the rise since Small and medium-sized enterprises, especially innovative SMEs, are playing an increasingly important role in Hong Kong and Mainland economies. GEM IPO activity has been extremely active as SMEs listings increased. HKEX are planning to tighten restrictions on GEM listings, which will become as strict as for Main Board listings; some unprofitable start-ups (e.g., MeiTu) can, through market capitalization and income testing, be listed on the Main Board directly. Number of IPOs on Hong Kong Main Board and GEM GEM Mainboard H Number of A-share IPOs on Shanghai and Shenzhen Stock Exchanges H 2017 Shanghai Stock Exchange Shenzhen Stock Exchange Sources: EY statistics, HKEX *Data after 25 June 2017 is estimated based on the prospectuses and public data Page 16

18 Hong Kong: small and medium-sized IPOs play a leading role, causing further decrease in average funds raised In 1H 2017, the proportion of small and medium-sized IPOs continued to increase, and the average funds raised fell to HKD1 billion, striking the bottom since % of funds raised of IPOs were less than HKD1 billion Semi-annual analysis for average IPO funds raised during H 2017 HKD billion $6.5 $6.0 $5.1 $4.4 $3.1 $2.3 $1.5 $1.4 $4.4 $3.9 $3.3 $2.6 $1.9 $1.2 $1.5 $1.8 $1.0 $2.3 $2.0 $1.9 $1.7 $1.9 $2.9 $1.8 $1.1 $1.9 $0.8 Sources: EY statistics, HKEX *Data after 25 June 2017 is estimated according to the prospectus and public information Page 17

19 Hong Kong: stock market rose, resulting in higher issue prices of IPOs In 1H 2017, the outstanding performance of the Hong Kong stock market has pushed up the issue price of IPOs. For about 40% of IPOs, the issue price is higher than the middle rate, reaching an increase of 3% compared with the same period of Smaller GEMs are more favored by investors. For 42% of IPOs, the issue price is higher than the average rate, higher than that of the Main Board (38%). Percentage of IPOs with an issue price higher than the middle rate (1H 2016 vs1h 2017) 35% 38% 40% 42% 37% 40% Mainboard GEM All 1H H 2017 Sources: EY statistics, HKEX *The statistics is based on data of pricing before 25 June 2017 Page 18

20 Hong Kong: 97% shares of Main Board achieved oversubscription led by optimistic investor sentiment In 1H 2017, 97% of IPOs in Hong Kong were oversubscribed, exceeding78% of the same period in Analysis of top 10 oversubscribed IPOs in 1H 2017 No.1 ISDN Holdings (Industrials) 1,891x Of the top 10 oversubscribed IPOs, half was from the infrastructure sector. No.2 Microware (TMT) 1,117x No.3 No.3 大仓控股 No.3 Okura Holdings (Technology, 大仓控股 media and telecommunications) (TMT) ( 科技 传媒和电信 ) 1,077x 1077x 1077x The first IPO of elderly home care enterprise was attractive to the market. Sources: EY statistics, SEHK *Based on the shares oversubscribed by public investors of Hong Kong s Main Board **Data as of 25 June 2017 GMT+8 Above 700x No.4 SH Group (Construction and infrastructure) No.7 799x Milestone Builder (Construction and infrastructure) 587x No.8 Sanroc International (Industry) 356x No.5 Pine Care Group (Healthcare) 796x No.9 Royal Deluxe Holdings (Construction and infrastructure) 349x No.6 G & M Holdings (Construction and infrastructure) 741x No. 10 Lai Si Enterprise Holding Limited (Construction and infrastructure) 187x Page 19

21 Hong Kong: number of listed overseas companies increased Semi-annual 年海外企业上市数量半年分析 analysis on the number of overseas listed companies In 1H 2017, there was an increase in the number of overseas enterprises, especially Asian enterprises, which went to public in Hong Kong. Five overseas enterprises were listed in Hong Kong in 1H 2017, of which four were from Asia. The market was enthusiastic about overseas companies, with two overseas companies ranking among the top three for oversubscription (ISDN Holdings and Okura Holdings). Overseas listed companies were from the TMT, industrials, energy, construction and infrastructure and other industries 2 Company name Persta Resources SHIS 1 Okura Holdings 0 Nexion Technologies 4 Country 0 Industry Funds raised (HKD million) Canada Energy and power 220 Singapore Construction and infrastructure 201 Japan TMT 150 Singapore H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 1H TMT 72 5 Source: EY Statistics, HKEx* The statistics is based on data of pricing before 25 June 2017 ISDN Holdings Singapore Industrials 50 第 20 页 全球首次公开募股 (IPO) 市场调研报告

22 Hong Kong: education enterprises IPOs became favorable In 1H 2017, two education enterprises were ranked amongst the top 10 IPOs in Hong Kong, while a total of five education enterprises went public in Hong Kong. The Law of the People s Republic of China on Promotion of Privately-run Schools to be implemented will favor private education enterprises and promote the capital market transaction of the education sector. Top 10 IPOs of Hong Kong in 1H 2017 HKD million Guotai Junan Securities 17,249 Four financial institutions contribute nearly 70% of the funds raised of the top 10 IPOs Guangzhou Rural Commercial Bank 8,073 Distribution of top 10 IPO industries by funds raised in 1H 2017 Others 23% WUXI BIOLOGICS Jilin Jiutai Rural Commercial Bank China Everbright Greentech Bocom International 4,572 3,461 3,381 1,968 China YuHua Education 1,768 Education 7% Minsheng Education Group 1,404 Financials 70% Kunming Dianchi Water Treatment 1,329 New Century Healthcare 957 Sources: EY statistics, SEHK *Data after 25 June 2017 is estimated according to the prospectus and public information Page 21

23 Hong Kong: funds raised in financial sector stayed ahead Sources: EY statistics, SEHK *Data after 25 June 2017 is estimated according to the prospectus and public information Page 22 Top five industries by number of IPOs Construction HKD$m $31,303 Top Retail, five consumer industries by amount of funds raised products and services 10 9 TMT Financials Industrials Top five industries by funds raised $6,225 $5,914 $5,552 Financials Health Retail, consumer products and services Energy and power 7 $2,234 Construction In terms of funds raised from IPOs, the financial sector ranked first, hitting 58% of funds raised in 1H 2017, down from 74% over the same period in 2016 The number of IPOs in the construction and infrastructure sector increased rapidly and tied for the first place, which was inextricably linked with the HKEX s strong promotion of Hong Kong as an investment and financing center under the Belt and Road Initiative which further promoted IPOs of infrastructure-related companies. IPOs of education enterprises pushed the number of consumer products & retail of IPOs up. The Mainland China Law on Promotion of Privatelyrun Schools to be implemented and the second-child policy will promote IPOs of education institutions.

24 US: IPO activity remained subdued but future is promising In 1H 2017, a total of four Chinese companies were listed in the US and raised USD274 million. The number of IPOs were equal to the same period of last year and the funds raised decreased 39% year-on-year. The majority of companies that were listed in the US were from the education, fintech and health care industries, which are hot industries for IPO listings in the US The much anticipated implementation of the Law of the People s Republic of China on Promotion of Privately-run Schools, the second-child policy and a higher valuation of the US market were the main drivers for Mainland's education enterprises to go public in the US Since 2H 2015, mainland China s fintech industry has undergone a period of consolidation. Domestic back door listings or IPOs were faced with challenges. As fintech companies enjoyed favorable prospects in the US market, Mainland s fintech companies were attracted to go public in the US. Mainland companies still have a strong interest in listing in the US, focusing on fintech, health care, education, life science and technology and other industries The liquidity and attractive valuation of the US capital market and the US investors' enthusiasm on high-growth and promising companies have made the US market an attractive place for China's private high-tech companies and enterprises in the new economies industries. 1H 2016 vs 1H 2017 No. of IPOs US$ m Total funds raised 1H H H H NYSE NASDAQ NYSE NASDAQ Sources: EY statistics, American Stock Exchange Page 23

25 US: stricter policies in mainland China mitigated delisting trend In 1H 2017, four enterprises were delisted from the US stock market, down by 79% from the same period in The reasons for the decrease in the number of enterprises engaging in privatization mainly include: Stricter policies on back door listings in mainland China, longer queuing time for IPO and uncertainty in relisting Higher risks of privatization and more complex processes More difficult to delist as the privatization needs to be settled in USD The number of Chinese enterprises engaging in delisting H2015 2H2015 1H2016 2H2016 1H2017 Sources: EY statistics, public data compilation Page 24

26 2H 2017 Greater China s IPO Market Outlook Page25

27 A-share: moderate adjustment on issuance speed and steady reform of the capital market Moderate adjustment on IPO issuance and the aim to destocking remains New layer is added to the New Third Board and a Layer of Choice is expected to be launched in future More enterprises listings transfer from the New Third Board to A-share 4 2 Decrease in the scale of IPOs and increase in small-and medium-sized new shares Further strengthening of market supervision and leveraging of big data to develop smart monitoring model 6 The inclusion of China A- shares in the MSCI emerging markets index will attract more international capital flows Page26

28 A-share: TMT, industrials and materials were the top three industries in IPOs Financials 5% Retail, consumer products and services 9% Industries of enterprises in IPO pipeline by the IPO number* Health 11% Others 16% Materials 15% *Data released by CSRC as of 22 June 2017 Industrials 22% TMT 22% IPO approvals have accelerated to clear heavy backlog in the A-share market. According to data as of 22 June, there were 585 enterprises in the IPO queue list of CRSC, down by 20% from the end of Although the approval process for IPOs has slowed down due to the sluggish market, the speed was expected to remain at stable rate. In the IPO pipeline, TMT, industrials and materials were the top three industries. There were still more than 10 cities and rural commercial banks queuing for IPOs. The Mainland China Law on Promotion of Privately-run Schools will be effective in September 2017, and more education enterprises are expected to consider A- share IPOs in future. Page27

29 Hong Kong: number of IPOs is expected to be driven by SMEs It is expected that IPOs will raise about HKD200 billion in 2017, the same level as in Driven by the increase in the number of SME listings, especially on the GEM, the number of IPOs is expected to increase. Positive factors: The recovery in global economic environment and the sound performance of emerging market will benefit capital market in The deepening of connectivity between mainland China and Hong Kong, the low valuation, high growth and high dividend yields of the Hong Kong stock market and other factors will attract more domestic and foreign investments in Hong Kong. Hong Kong is expected to play a key role in the Belt and Road Initiative. The SFC and the HKEX are positive on the IPOs of enterprises relating to the Initiative. The urban agglomeration development plan for the Greater Bay Area of Guangdong-Hong Kong-Macau is expected to invigorate Hong Kong s economic development. The HKEX is actively attracting high-quality enterprises to list in Hong Kong by diversified means, such as introducing the New Board. The strong interest in listing in Hong Kong underpins a high number of enterprises to go public on the HKEX. Negative factors: Rising global protectionism and high uncertainty in economic and political policies pose challenges to the global economy. Fed s decisions to lift interest rate and shrink balance sheet have a negative impact on the market liquidity in Hong Kong. Financial deleveraging means that China's interest rate will shift from easy to neutral. As the A-share IPO process accelerates, some enterprises may choose to go for A- share IPOs Page 28

30 Hong Kong: improve issuance system and establish a multi-layer capital market The HKEX is committed to improving IPO system and establishing multi-layer capital market to attract more highquality and high-growth enterprises to list in Hong Kong in future. The planned New Board will offer more options for innovative company listings, attracting more innovative enterprises to go public in Hong Kong. It will be even more attractive if the Stock Connect programs welcome the New Board enterprises. Whether the New Board can increase the amount of transactions in a short term depends on whether it can attract giant enterprises like Alibaba to seek secondary listing in Hong Kong Main Board The SFC and the HKEX are analyzing the consultation feedback for the Joint Consultation Paper on Proposed Enhancements to The Stock Exchange of Hong Kong Limited s Decision- Making and Governance Structure for Listing Regulation GEM Consultation on issues relating to GEM has been launched. Issues include improving the requirements for IPO application and transfer of listing from GEM to Main Board; abolishing the full allotment listing mechanism; extending the post-ipo lock-up requirements on controlling shareholders. The public consultation period lasts for two months New Board The HKEX has proposed to establish a New Board. The New Board will be divided into New Board PREMIUM and New Board PRO for different investors, enabling enterprises with same share but different rights to go listing. It also features an accelerated delisting mechanism. The consultation period lasts for two months Page29

31 Hong Kong: better connect with the Mainland to consolidate its leading position Mainland China The connectivity initiatives between Hong Kong and mainland China will further promote Hong Kong s advantages and strengthen its position as the world s leading stock market Shanghai and Shenzhen- Hong Kong Stock Connect program: progress steadily Bond Connect: underway IPO Connect: new proposal Hong Kong Page30

32 Hong Kong: promote IPOs of related enterprises through the Belt and Road Initiative Key industry drivers for IPO fundraising in Hong Kong in 2H 2017: Financials TMT Consumer products & retail Construction Energy & power The SFC and the HKEX are positive towards the IPOs of Belt and Road projects, which are expected to attract relevant industries, e.g., construction and infrastructure, communications facilities, financials, energy and industrial facilities, to go listing in Hong Kong. Meanwhile, the trend to list in Hong Kong for enterprises from countries along the Belt and Road, especially those from Asia, will remain. Such trend is also applicable to educational enterprises. Enterprises from industries such as pension, film and entertainment are expected to pursue business development through IPOs. Page 31

33 Credentials for EY on assisting enterprises in listing in key markets EY has made outstanding performance on assisting enterprises in their listings in Hong Kong, mainland China and USA H 2017 Market share of IPOs by Big Four in Hong Kong Main Board H 2017 Market share of IPOs by Big Four in Shanghai and Shenzhen stock exchanges H 2017 Market share of IPOs of China concept stocks by Big Four in the US 25% EY 27% EY 20% EY 75% 73% 80% Other Big Four Other Big Four Other Big Four By the number of companies served By the number of companies served By the number of companies served Sources: HKEX, eastmoney.com, NASDAQ and EY statistics Page 32

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