The global initial public offerings of Chinese technology companies continued to rebound in the second quarter of 2014 with 14 IPOs and proceeds of US$3.7 billion, according to the latest PwC’s global technology IPO review. Compared to the previous quarter, this was a 277% increase in proceeds and a 27% increase in number of deals.

       

Total Chinese technology IPOs increased from 11 in Q1 2014 to 14 in Q2 2014 with nine listed in the US, three in Hong Kong and two in China. NYSE and NASDAQ proved popular to Chinese companies looking to take advantage of the strength of the US capital markets. Overall, 30% of global technology IPO activity in Q2 2014 was cross border.

 

“The US and China recorded the most activity in Q2 2014 with 35% (15) and 33% (14) of total deals respectively,” says Jianbin Gao, PwC China technology industry leader. “Second quarter activity broadened geographically as the global economy continued to show improvement and investors' confidence in IPO stocks further strengthened. Chinese technology companies performed exceptionally well on the US capital markets taking four out of the top 10 places in terms of IPO proceeds.”

 

Looking at the global capital markets in detail, the US raised US$4.1 billion in total proceeds followed by China which raised US$3.8 billion, the UK at US$3.1 billion and HK at US$419 million. In terms of average proceeds, the UK with US$523 million was considerably higher than US with an average deal size of US$273 million.

 

Shanghai and Shenzhen, with US$221 million and US$127 million in proceeds, respectively, were impacted by both capital market strength in the US and tightened disclosure requirements for listing companies in China.

 

Globally, in Q2 2014, the internet software and services sector had the most IPOs (21) with proceeds of US$5.2 billion; followed by 11 IPOs in the software sector which raised US$3.1 billion. Increasing internet penetration, growing e-commerce and rebounding consumer demand in developing economies, and the shift from product to service across the industry as a whole, is resulting in an accelerating demand for internet and software innovations.