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Dec. 24 (NBD) – As of December 18 this year, 209 companies have been listed in Hong Kong with funds raised totaling 280 billion Hong Kong dollars (35.8 billion U.S. dollars), which made the Hong Kong stock exchange take top slot in global IPO rankings.

However, the performance of newly listed new economy companies prevented the marekt from being optimistic.

Statistics showed since the beginning of 2018, stock prices of 80 percent of newly listed tech companies like Xiaomi, Meituan-Dianping, Tongcheng-Elong and iDreamSky have fallen below the IPO prices.

Stock prices of Meitu, China Literature Limited and many new economy companies which made debut last year declined by over 50 percent this year. The market capitalization of Meitu even dived to less than 10 billion Hong Kong dollars (1.3 billion U.S. dollars) from nearly 100 billion Hong Kong dollars (12.8 billion U.S. dollars) at its peak.

According to Charles Li, executive director and chief executive of the Stock Exchange of Hong Kong Limited, the dip of stock prices has nothing to do with the qualities of the firms and is only a natural result of investors' adjustments of expectations on the basis of the market and stock evaluation.

Hu Yanru, general manager of KS Fund, noted that the decrease should be attributed to the stagnant market and the fact that investors on the Hong Kong stock exchange hold a relatively rational attitude especially towards the new stock market.

Li Yu, chief investment officer at GaoTeng Global Asset Management Limited, observed that tremendous funds are flowing to the primary market for profits in the IPOs, making the evaluation of stocks in the primary market exceed that of the secondary market. As the secondary market is short of low-priced new stocks, the situation becomes even worse, Li Yu added.

With regard to the high IPO prices of new stocks, Charles Li explained that it is due to the high evaluation from the early private investors, insufficient stock offering from new economy companies, or the deviation on the judgments on the market from investment banks and issuers. But the market plays a role for self-adjustment and as a result, stock issuers began to rationally adjust the IPO price range and the issuing scale.

In his view, new economy companies in mainland China have strong demand for financing and Hong Kong has always been the first choice for companies in mainland China thanks to the advantage brought by the "One Country, Two Systems" policy. Hong Kong will still see companies stream in next year and will still boast strong competitiveness, he added.

According to Deloitte's prediction, there will be around 200 companies debuting in Hong Kong in 2019 with the funds to be raised to reach up to 230 billion Hong Kong dollars (29.4 billion U.S. dollars) and companies related to science and technology, pharmaceuticals, biological technology and education will be likely to draw the most attention from the market.

Morevoer, KPMG also forecast that Hong Kong will mostly see medium- and small-sized IPOs next year.

Sources indicated that Ping An Insurance's Lufax, Didi Chuxing, as well as Bytedance, parent company of Jinri Toutiao and Douyin, will go public on the Hong Kong exchange in 2019.

Email: wenqiao@nbd.com.cn