"Sunny Way" contributed this article to NextInsight
It has been just three weeks since Garden Fresh submitted its application, and the exchange is evaluating it.
The big-picture question is: What is the success rate of IPO aspirants in HK?
I have managed to find the statistics from the HK Stock Exchange website (see table).
The key finding should come as a relief to Sino Grandness shareholders: The HKEx rejected only 2 out of 127 IPO aspirants in 2014 and only 5 out of 143 in 2015.
It certainly is a lot easier to 'pass' this than to pass the CFA exams!
However, it doesn't mean that all the rest who were not rejected eventually got listed.
There were applications that lapsed or were withdrawn.
I guess lapses and withdrawals occurred for reasons such as a change of minds by the IPO aspirants due to volatile/bad market conditions, etc.
In 2014 when market conditions were relatively stable (as reflected by the performance of the Hang Seng Index), there was healthy investor demand for IPOs, and lapses were significantly lower.
In 2015, a volatile market and a downturn in the Hang Seng Index would have dampened demand, thus valuations were affected, leading to some companies choosing not to go ahead with the IPO.
Such are the key factors impacting IPO aspirants. I doubt there were many lapsed or withdrawn cases, if at all, involving accounting fraud and poor corporate governance.
Given the statistics, and barring any negative factors specific to Garden Fresh, I am considerably inclined to expect that Garden Fresh will sail through to a successful listing on the HK in due course.
Garden Fresh's application proof (which is the draft prospectus) indicates that the likely listing date is July 6 this year.
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IT IS KNOWN among my paper-chasing friends in the financial industry that globally, the passing rate for the CFA Level 1 exam is roughly 45%. |
It has been just three weeks since Garden Fresh submitted its application, and the exchange is evaluating it.
The big-picture question is: What is the success rate of IPO aspirants in HK?
| IPOs | 2016 YTD |
2015 | 2014 | |
| Applied | 43 | 143 | 127 | |
| Listed | 5 | 89 | 103 | |
| Lapsed | 0 | 34 | 19 | |
| Withdrawn | 1 | 4 | 3 | |
| Rejected | 0 | 5 | 2 | |
| Hang Seng Index | -1.20% | -8.30% | 4.60% | |
The key finding should come as a relief to Sino Grandness shareholders: The HKEx rejected only 2 out of 127 IPO aspirants in 2014 and only 5 out of 143 in 2015.
It certainly is a lot easier to 'pass' this than to pass the CFA exams!
However, it doesn't mean that all the rest who were not rejected eventually got listed.
There were applications that lapsed or were withdrawn.
I guess lapses and withdrawals occurred for reasons such as a change of minds by the IPO aspirants due to volatile/bad market conditions, etc.
In 2014 when market conditions were relatively stable (as reflected by the performance of the Hang Seng Index), there was healthy investor demand for IPOs, and lapses were significantly lower.
In 2015, a volatile market and a downturn in the Hang Seng Index would have dampened demand, thus valuations were affected, leading to some companies choosing not to go ahead with the IPO.
Such are the key factors impacting IPO aspirants. I doubt there were many lapsed or withdrawn cases, if at all, involving accounting fraud and poor corporate governance.
Given the statistics, and barring any negative factors specific to Garden Fresh, I am considerably inclined to expect that Garden Fresh will sail through to a successful listing on the HK in due course.
Garden Fresh's application proof (which is the draft prospectus) indicates that the likely listing date is July 6 this year.
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