First-tier | Goldman Sachs: The total amount of equity issuance and financing of Chinese companies in 2021 exceeded US$310.3 billion

Tencent News "Frontline" author He Xi

On December 24, 2021, Goldman Sachs data from internationally renowned investment bank pointed out that despite the challenging market environment in 2021, the total amount of equity and equity-linked issuance financing of Chinese companies exceeded US$310.3 billion, hitting a record high after US$281.5 billion in 2020.

In overseas markets, technology, media and communications (TMT) and healthcare remain the most active distribution sectors. The TMT industry accounted for more than half of the overseas Chinese stock issuance, up 31% year-on-year. The number of initial public offerings in the healthcare sector accounted for 31% of overseas Chinese stock offerings, an increase of 44% year-on-year, and the return of Chinese stocks continued to be active, with eight Chinese companies returning to Hong Kong stocks, raising a total of US$12.9 billion.

According to Deallogic market data, Goldman Sachs ("Goldman Sachs") ranks first among international investment banks in the global equity and equity-linked offerings of Chinese companies, with a market share that continues to grow to 8.0%.

Goldman Sachs said that in 2021, the development of the A-share market has achieved outstanding results. The establishment of the Beijing Stock Exchange has further improved and diversified the market layout of domestic exchanges; expanded the pilot listing of red-chip enterprises and the transfer of selected layers of the New Third Board to make the domestic stock market structure more flexible and rich; the reform of the registration system has continued to advance; and the pricing rules and pricing efficiency of new stock issuance have been continuously optimized.

Since 2021, A-share equity and equity-linked issuances have raised US$173.7 billion, up 23% year-on-year, accounting for 56% of the total global equity and equity-linked financing of Chinese companies.

"The issuance of new shares in the domestic market will accelerate significantly in 2021," said Fan Xiang, chairman of Goldman Sachs Gaohua Securities Co., Ltd. and co-director of Goldman Sachs China Investment Banking Department, "Which reflects the financing needs of Chinese enterprises in the development and the continuous development of the A-share market, which has played a greater role in supporting the financing needs of the real economy."

Looking ahead to 2022, Yajun Wang, co-head of equity capital markets at Goldman Sachs Asia (excluding Japan), said: "Hong Kong is one of the major global equity trading hubs with a large international investor and issuer base. In the future, more and more Chinese companies will be listed in Hong Kong, and the return of Chinese stocks will continue to be active. In terms of sectors, TMT and Healthcare will continue to lead the way in Chinese corporate equity and equity-linked issuances. In line with domestic consumption and themes such as new energy vehicles, autonomous driving, and high-end manufacturing, we will also see more active stock issuance and financing in the consumer and industrial sectors. ”

Goldman Sachs Research estimates that the total size of global institutional investors' holdings of Chinese companies A-shares, Hong Kong stocks and American Depositary Receipts (ADRs) is currently about $2 trillion.