IPO Trends in Hong Kong SAR Market perspectives from Pamela Chung, Tricor’s Managing Director, Commercial of Hong Kong

In this special year where Hong Kong SAR is widely predicted to top the global IPO market again, our team at Tricor is delighted to welcome Pamela Chung as Managing Director, Commercial of Hong Kong. She has recently shared with leading media outlets including TVB, Hong Kong Economic Journal, Ming Pao, Hong Kong Commercial Daily and Oriental Daily with her outlook and perspectives on the IPO market in 2019.

(November 30, 2018) Closer Look on TVB – Pamela’s summary for 2018 and outlook for 2019

• The amount of IPO margin financing orders has significantly decreased in 2018. One reason is that investors had lost their faith in the after-market share price performance, if they don’t think the share price will rise, they won’t do IPO financing given that the cost of margin loans cannot be covered.
• The focus for 2019 IPO market will be TMT, BioTech, healthcare and education companies with medium offer size around HK$2bln-2bln, but it is still too early to comment depending on changes to the overall environment. There have been a few companies postponing their IPO process to 2019.
• Most listing candidates will be in the TMT (Technology, Media & Telecom) and BioTech sectors whether for America, Hong Kong SAR or Mainland China. With Shanghai Stock Exchange’s plan for a new board for high-tech companies, Hong Kong SAR will of course seize the opportunities for collaboration but the results will largely depend on the national policies of the PRC Government.

(2018年11月30日) 《時事多面睇》– 卓佳專業商務有限公司董事總經理鍾絳虹訪問

• 有做證券登記管理的註冊處公司都表示，今年市民借孖展抽新股的意欲明顯減少。「就算是很大型的新股，大家都覺得不當炒，要知道借孖展是要大家覺得當炒，覺得股價的升幅是遠高於借貸成本才會借，所以今年確實是幾乎沒有（頂頭鎚飛）。」
• 「明年的焦點應該都是新經濟，TMT（電訊媒體及科技）及生物科技、健康護理或者是教育，但不太覺得會有「巨無霸」，都是一些中型規模的，即是不是很大那些，即是二、三十億元那些。現時知道是這樣，但很多事經常變，現在言之尚早，因為有很多明年如果趨勢不同了，又會突然走出來，因為現時我知道有些企業，本來想上市那些，都覺得等明年觀望情況才啟動新股程序。」
• 「這類電訊、媒體及科技和生科股比較新，業務亦非傳統，所以大家看中的目標都是這類，都覺得增長差不多就去一市，所以我相信在全球，無論是美國、香港、中國大陸，大家的目標都會頗集中在這類新股。如果是合作，是一定有幫助的，但我認為內地很多事都是國策或者政策，很難去要求國家去遷就你。如果做不到，我相信香港唯有自己想辦法。」

(December 3, 2018) Ming Pao – Pamela Chung: WVR shares stagnant without southbound capital

• For WVR listing regime (weighed voting rights) introduced since this April, only Xiaomi and Meituan have so far adopted this model for their Hong Kong SAR IPOs. Given that HKEX is still working towards the inclusion of WVR companies in the stock connect scheme, and that the brand popularity of these companies seems to be much well received in the Mainland, the overall market reaction is therefore less heated than expected.
• Stocks relating to BioTech and new economy are set to be top choice for investors in the coming year.
• HKEX can reference US’s price discovery mechanism to allow more flexibility in the IPO offer price setting, such that more deals can get listed as scheduled.

(2018年12月3日) 《明報》– 鍾絳虹：W股無北水 難掀熱潮 小米美團股價「潛水」 名牌效應在港失效

• 卓佳商務部董事總經理鍾絳虹認為，W股未能掀起熱潮，其中一個主因或是暫時未能納入港股通買賣。作為「頭炮」的小米（1810）與美團點評（3690）股價表現不濟，市場盛傳採用WVR架構申請上市公司至今寥寥可數。卓佳商務部董事總經理鍾絳虹認為，W股表現不佳或與「北水」未能買賣有關，相信在內地開放投資者利用港股通買賣前，W股暫難掀起熱潮。
• 回顧2018年的香港新股市場，新經濟股依然是焦點，以平安好醫生（1833）、小米、美團等為例，不論市值、集資規模及話題度都絕對是市場焦點，但相比2017年的閱文（0772）、易鑫（2858）等，這股新經濟股熱潮明顯褪色；她相信，上市機制改革帶來的新經濟、生物科技股，在明年仍然是新股主題。
• 她表示，目前美國新股採用的「發現價格」機制，招股價會一直根據路演期間投資者反應而波動，而不會設定固定的價格範圍；香港或可在下限價設立類似機制，讓公司在有選擇時，可以考慮是否接受以較低價格上市。

Above: Excerpt from the article. Please refer to this link to view the article in full.

(December 3, 2018) Hong Kong Economic Journal – IPO Queen advocates flexible price discovery mechanism

• More flexibility is suggested in terms of setting IPO offer price ranges, a more flexible price discovery mechanism can help companies to go ahead with their listing plans instead of pulling deals, given the current volatile market environment.
• Hong Kong SAR is set to top the global IPO market for 2018, with a focus on new economy / BioTech businesses in 2019.
• Pamela’s 1st batch IPO client at Tricor in her first month includes a travel group under Tan Holdings Tan Siu-Lin and his son. She has also introduced Tricor as a one-stop services platform – not just IPO services but also company secretary, trust and other post-IPO services.

(2018年12月3日) 《信報財經新聞》– 新股女王倡擴靈活定價機制 下調最多兩成 新經濟股試行

• 卓佳（Tricor）香港商務部董事總經理、有「新股女王」之稱的鍾絳虹倡議，本港可考慮在新股定價方面給予更大彈性，例如按靈活定價機制最多下調20%，令準備上市的公司可因應最新市況調節，毋須擔心因定價太高導致最終擱置上市。她又指出，目前新經濟及生物科技股的可比較同業仍較少，價格發現（Price Discovery）較傳統新股困難，建議可先就此類股份實行上述新安排。
• 雖然近期不時傳出新股大削集資額或延遲上市，惟鍾絳虹預期，本港今年仍可奪得全球新股集資首位的寶座。展望明年，她相信，新經濟及生物科技企業仍是新股市場的主題。
• 雖然短短轉職兩個月，鍾緯虹已陸續接到IPO的委任。她形容現時自己所負責的工作較以前多元化，除了繼續協助客戶上市外，亦會為客戶提供公司秘書及信託等上市後配套服務。

Above: Excerpt from the article. Please refer to this link to view the article in full.

(December 8, 2018) Hong Kong Commercial Daily – IPO Queen advocates for Hong Kong’s role as leading innovator – Hong Kong’s glowing IPO glory thanks to Mainland Chinese Companies

• The fame of Hong Kong SAR’s IPO market thrives with the wave of Mainland Chinese companies. Ever since the IPOs of the leading “6Banks(ICBC, BOC, CCB, etc) & 3 Insurers(China Insurance, PingAn, etc)” in Hong Kong SAR local investors have boosted confidence.
  The current market spectrum is described as follows: the majority of renowned local brands in Hong Kong SAR are already listed, unless foreign investors really have a mandate to enter the mainland China market they may chose London and New York instead, the scale of investors’ interest in SEA companies may prevent them from a Hong Kong SAR listing. Therefore, the IPOs of Mainland Chinese companies will still be the mainstream supply in growing the Hong Kong SAR IPO market.
• With QFII and RQFII in place, foreign investors can enter the Mainland Chinese market much more easily. The “springboard status” of Hong Kong SAR may no longer be sustainable. To maintain the competitive advantage, it is best for Hong Kong SAR to set an example with new IPO models which can later be adopted in Mainland China – each financial centers in Mainland China should be about complementing each other, rather than competing. Even with the CDR scheme in Mainland China to attract top unicorns back from the overseas markets, Hong Kong remains gifted with a unique role in the overall ecosystem.
• Greater transparency is the key for companies in Mainland China planning for IPOs in Hong Kong SAR. With the advances of technology and social media, maintaining a positive brand image and creating value are ideal preparations.

(2018年12月8日) 《香港商報》– 沒有國企就沒有香港新股輝煌 新股女王籲港續做開放先行者

• 譽為「新股女王」的卓佳專業商務有限公司董事總經理鍾絳虹坦言，「若沒有國企，香港新股市場無法取得今天的輝煌。」展望未來，鍾絳虹認為，香港可由擔當「窗口」或「跳板」，轉型成為「先行者」，並與內地市場實現差異化，達至互補，避免做相同的事，相互競爭。
• 鍾絳虹稱，內地金融業經歷多年改革開放，已逐漸建立自身團隊；加上近年內地相繼落實「合格境外機構投資者」(QFII)及「人民幣境外機構投資者」(RQFII)，境外投資者已有直接進入內地市場的渠道，「假若內地持續開放，再過一段時間，外資已不再需要香港，直接進入內地市場，香港的『窗口』或『跳板』地位將會消失」。
• 雖然今天中資企業能夠獨當一面，但鍾絳虹寄語往後有意來港上市的中資企業：透明度越高，出現公關危機的機會就越小。她說，「隨著時代轉變，今天社交媒體極具散發信息的能力，故保持企業的透明度是相當重要。」鍾絳虹稱，不要以為「少講少錯」，若中資企業籌集資金，更要保持正面形象，皆因此舉可助企業發展。

Above: Excerpt from the article. Please refer to this link to view the article in full.