SHANGHAI, April 22 China's regulator posted
draft initial public offering (IPO) prospectuses for 18 Chinese
firms on Monday, bringing the total number of potential issuers
up to 46, with state media estimating they could raise as much
as 22.6 billion yuan ($3.6 billion) from investors.
The anticipated resumption follows a two-month flurry of
IPOs in January and February this year, after regulators let the
IPO market go dark for 14 months beginning in 2014, which some
said was an attempt to boost sagging mainland stock indexes.
The CSRC released draft prospectuses for 28 companies on
The official China Securities Journal said that 23.9 billion
yuan worth of capital exited the domestic stock market on Monday
as some Chinese investors became concerned that new IPOs would
divert funds from existing shares.
"The flight of main stock investment funds amid a sharp fall
of the main index means that damage to the market by the
resumption of IPOs cannot be overestimated," the newspaper said.
The CSI300 Index, which tracks the largest tickers
in Shanghai and Shenzhen, has lost 1.69 percent since Friday,
when media first reported the resumption of applications.
But uncertainty about how many of these prospective
companies will be allowed to actually list, and how soon,
appears to have blunted the impact of the announcement on stock
markets, and investment bankers have expressed uncertainty as to
how hot the China Securities Regulatory Commission (CSRC) will
let the IPO market actually get in 2014.
Some analysts have predicted the mainland IPO market could
hit 250 billion yuan in 2014.
None of the 46 firms has been approved to launch IPOs yet,
but the CSRC is expected to review these applications in May and
permit the resumption of IPOs within the month, local analysts
IPOs paused in March as the CSRC ordered companies and
underwriters to update application materials, including
applicants' 2013 annual results.
In reaction to the new rules, and possibly to signs that the
CSRC was cracking down on pricing misbehaviour by underwriters
and inside stakeholders, dozens of Chinese companies have
already shelved their listing plans, according to CSRC data
published in April.
The total number of firms on the IPO waiting list dropped to
606 in the week ended on April 18, down from 675 firms in the
previous week, according to the list published on the
regulator's website, www.csrc.gov.cn.
BIG NAMES YET TO COME
The 46 applicants that have published prospectuses are
dominated by firms in new materials, environment protection and
manufacturing. Hua'an Securities Co Ltd is the only financial
Medium-sized Hua'an, based in the eastern Chinese city of
Hefei, plans to issue 800 million yuan-denominated A shares on
the Shanghai Stock Exchange to raise an unspecified amount of
money to consolidate its capital base, it said in its draft
prospectus published late on Monday.
State-owned Shanghai Film Co Ltd plans to raise nearly 1
billion yuan to build new cinemas and update existing ones to
meet increasing entertainment demand in China's financial hub,
its prospectus said on Saturday.
Another film producer, Beijing-based Wanda Cinemas plans
raise 2 billion yuan for similar purposes.
However, a slew of big names still on the CSRC's waiting
list have yet to publish their prospectuses.
These include large brokerages such as Shanghai-based Guotai
Junan Securities and Shenzhen-based First Capital Securities, as
well as a cluster of city commercial lenders including the Bank
of Shanghai, the Bank of Hangzhou and the Bank of Chengdu.
There are also a number of conglomerates owned by China's
central government in line, including China National Nuclear
Corp, Huadian Heavy Industries Co Ltd and China Film Group Corp.
(Reporting by Lu Jianxin and Pete Sweeney; Editing by Kim