Precise Investors

Tuesday, December 6, 2022

Chinese companies halt listing plans amid Covid outbreak

Covid outbreak

Over the past week, 15 companies seeking IPOs on Shanghai’s tech-focused STAR Market have suspended applications, almost all citing impacts from the epidemic

More Chinese companies are halting domestic listing plans, filings show, as the country’s biggest coronavirus outbreak in two years hampers due diligence and information gathering, affecting an estimated $9 billion-plus in fundraising.

Over the past week, 15 companies seeking initial public offerings (IPOs) on Shanghai’s tech-focused STAR Market have suspended applications, almost all citing impacts from the epidemic, exchange filings showed. The city started lockdowns on Monday.

In Shenzhen, which conducted three rounds of mass testing in March, 67 IPO applicants targeting the start-up board ChiNext have suspended the listing process this month, citing the need to update disclosure to regulators, according to filings.

In all, the suspensions potentially delay fundraising worth 60 billion yuan ($9.4 billion), official newspaper Securities Times estimated. That’s equivalent to more than one-tenth of China’s roughly $84 billion in domestic IPO fundraising in 2021.

The real impact on IPO fundraising is likely bigger, as listing hopefuls on China’s main equity boards are not required to make timely disclosures on the vetting process.

The share sales disruption piles pressure on an economy already suffering from developers’ debt woes, anaemic consumption, and contagion from the Ukraine crisis.

To minimise the impact, the Shanghai Stock Exchange has vowed to maintain the steady operation of capital markets during the ‘special’ virus control period.

The bourse said on Sunday it would continue to vet share sale plans by STAR Market candidates and strengthen online communications with issuers and underwriters.

Nevertheless, a growing number of IPO applicants are pressing the pause button, at a time when many companies are required to update their financial results.

Nanjing CIGU Technology Corp, which plans to list on STAR, said on Tuesday it is applying to the Shanghai bourse to suspend vetting of its application.

Other STAR candidates which halted IPO plans over the past week include Guangzhou Xaircraft Technology Co, CICT Mobile Communication Technology Co and Yuanjie Semiconductor Technology Co.


The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply