China Equity House: CICC

IFR Asia Awards 2021
3 min read
Fiona Lau, Karen Tian

All rounder

CICC stood out in 2021 by putting its cross-border capabilities to work on some of the biggest deals of the year, after offshore listings of Chinese technology companies largely came to a halt.

China’s equity capital market started the year with a bang, but sentiment turned in July after regulators launched a cybersecurity probe into ride-hailing giant Didi Global. That eventually led to an overhaul of rules governing cybersecurity and overseas listings, and froze most of the planned Hong Kong or US IPOs in the second half.

As a result, many rivals turned their attentions to other countries, but CICC continued to dominate China by leading high-profile home listings in Shanghai.

“CICC’s advantage is that we are one of the very few banks on the street that can help clients in various markets,” said Xu Jia, head of international investment banking. “As long as we have this client base on our hands, we can help them do the right thing and choose the listing venue according to regulatory and market changes.”

The country’s oldest investment bank acted as a sponsor for the Rmb47.9bn (US$7.5bn) Shanghai listing of China Telecom and the Rmb48.7bn Shanghai listing of China Mobile, the country’s largest in 10 years.

Both Hong Kong-listed telecom providers had their American depositary shares delisted from the NYSE in December 2020 after they were put on a US list of companies designated as owned or controlled by the Chinese military.

Chinese regulations do not allow companies to sell shares below net asset value but China Telecom’s H-shares had been trading substantially lower than the NAV before the Shanghai listing.

CICC drew on its extensive experience in H-to-A listings and proposed a new dividend plan to help China Telecom boost its H-share and investor confidence, successfully narrowing the gap between the H-share market price and the A-share offer price.

Leveraging its international expertise, CICC also helped US and Hong Kong-listed biotech BeiGene complete a Rmb22.2bn Shanghai Star IPO, the largest in 2021 on the Nasdaq-style board.

Riding on the upbeat sentiment surrounding the electric vehicle sector, the bank raised a combined US$5.63bn for EV maker BYD via two placements, and also sold a US$750m convertible bond for Nasdaq-listed Li Auto before engineering a US$1.52bn Hong Kong listing for the latter in August.

In Hong Kong, CICC was the most active IPO bank last year, sponsoring 31 floats out of 97 on the main board.

It led deals from the technology and healthcare sectors, such as the US$1.2bn IPO of supply chain finance start-up Linklogis and the US$460m IPO of Keymed Biosciences, and was involved in the secondary listings of US-listed online car-trading marketplace Autohome and online travel firm

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