China’s IPO applications slumped by a third in the first half of 2023, as earnings volatility, a slowing economy and tighter regulatory scrutiny deterred potential candidates, reports Reuters. Chinese exchanges, which vet initial public offering (IPO) plans, accepted around 330 new applications during the period, down from more than 500 a year earlier, exchange data shows.
Although Beijing has adopted a registration-based system designed to let the market decide which companies list, bankers have said that the process largely remains at the discretion of authorities, using unwritten rules to decide on the grounds of national security or industrial policies.
Terence Ho, Greater China IPO Leader at EY, attributed the sharp fall in applications in January to June partly to some listing hopefuls failing to meet revenue or profit requirements as last year’s Chinese economic downturn hit their businesses.
