CICC stood out in 2019 for its efforts to develop China’s new tech board and its consistent ability to deliver equity capital to Chinese companies in the onshore and offshore markets.
The country’s oldest investment bank led 64 equity and equity-linked deals for Chinese issuers during the review period to raise a total of US$12bn. But it was CICC’s contribution to market development and its ability to raise capital across multiple exchanges that helped it stand out from the competition.
Shanghai’s Nasdaq-style Star board welcomed its first batch of listings on July 22, only nine months after Chinese President Xi Jinping endorsed plans for its development.
The Star board broke introduced a registration system for IPO applications, shifting most responsibility for vetting candidates to the stock exchange, speeding up the application process and allowing companies to set a more market-driven price.
CICC, leveraging on years of experience raising funds offshore, has positioned itself as the regulators’ go-to bank for market reform, and was heavily involved in the development of the Star board, advising both on listing rules and follow-on requirements.
By the end of IFR’s review period, the bank had sponsored 17 of a total of 177 Star applications, including the Rmb10.5bn (US$1.5bn) listing of China Railway Signal and Communication, the largest Star IPO completed so far. It is also the sponsor for Ucloud Technology, the first applicant with weighted voting rights, China Resources Microelectronics, the first with a red-chip structure and Suzhou Zelgen Biopharmaceuticals, the first loss-making aspirant.
CICC continued to drive reform on the main boards, too. It guided investors towards market-based pricing for the US$1bn-plus A-share IPOs of China Zheshang Bank, CGN Power and Chongqing Rural Commercial Bank, using relative valuations between China and Hong Kong rather than the traditional domestic approach, where fundraising targets are fixed well in advance.
Innovations also took domestic concerns into account, where needed. CICC introduced a six-month lock-up on 70% of the institutional investors in big IPOs, to make sure retail investors, the main players in the A-share markets, were adequately protected.
In the offshore market, CICC arranged the US$1.6bn follow-on of Nasdaq-listed e-commerce company Pinduoduo and the US$645m Nasdaq IPO of Luckin Coffee.
In Hong Kong, CICC was the only bank promoted to joint global coordinator from joint bookrunner when Budweiser Brewing Company APAC raised HK$45bn in its second listing attempt in September.
CICC put its cross-border capabilities to work on some of the biggest deals of the year. At the end of IFR’s review period, it kicked off the mammoth US$11bn secondary listing of US-listed Alibaba Group Holding in Hong Kong, earning the highest fee among the syndicate.