Is your business model resilient enough to weather any storm? - Global IPO trends: Q4 2020 - EY
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Is your business model resilient enough to weather any storm? Global IPO trends: Q4 2020 ey.com/ipo/trends #IPOreport
Contents
Global IPO market 3
Americas 10
Asia-Pacific 16
Europe, Middle East, India and Africa 25
Appendix 32
About this report
EY Global IPO trends report is released every quarter and looks at the IPO markets,
trends and outlook for the Americas, Asia-Pacific and EMEIA regions.
The current report provides insights, facts and figures on the IPO market for the full
year of 2020* and analyzes the implications for companies planning to go public in
the short and medium term.
You will find this report at the EY Global IPO website, and you can subscribe to
receive it every quarter. You can also follow the report on social media: via Twitter and
LinkedIn using #IPOreport
*The full year of 2020 covers completed IPOs from 1 January 2020 to
31 December 2020. Special purpose acquisition company (SPAC) IPOs are excluded
in all data included in this report, except where indicated.
All values are US$ unless otherwise noted.
Subscribe to EY Quarterly Global IPO trends reports
Get the latest IPO analysis direct to your inbox.
Global IPO trends: Q4 2020 | Page 2
Global IPO market
In a year full of surprises, 2020 IPO markets
defy expectations
“
2020 was full of surprises. Market volatility in the first half of the year was higher than any
time since the global financial crisis. But volatility quickly subsided, with the year ending on
the back of some stellar IPO market performances. Buoyant global IPO markets have
demonstrated the resilience of equity markets despite the pandemic. Capital markets and
IPOs allow high-growth companies to fund innovation, accelerate growth and make
significant contributions to the society. Looking to the first half of 2021, continued fiscal
stimulus, abundance of liquidity and optimism in COVID-19 vaccines should sustain IPO
momentum. However, investors should beware of any potential market correction, especially
for those companies that have seen their share prices making substantial gains from the
market rally in 2020.
Paul Go
EY Global IPO Leader
Global IPO trends: Q4 2020 | Page 3
Global IPO market summary — Q4 2020
Key highlights • Q4 2020’s five largest IPOs by proceeds included JD Health (US$4.0b),
Airbnb Inc. (US$3.8b), DoorDash Inc. (US$3.4b), Allegro.eu SA (US$2.7b) and
• In this environment of low interest rates and expansionary monetary policies, 2020 equity Lufax Holding Ltd. (US$2.7b) — all technology-related companies.
markets have recovered to pre-pandemic levels and some even reached new heights. Global
IPO markets have shown their resilience, supporting fast-growing and innovative • Overall, there was a healthy spread of IPO activity across geographies,
companies, which are offering new services and products in response to the changing including the usual players (the US, Mainland China and Hong Kong) and
market dynamics. significant uptick in activity from Australia, the UK, Brazil and Japan exchanges.
The lower market volatility during the quarter has also helped to provide more
• Q4 2020 saw 490 IPOs raise a total of US$101.4b. This was 30% higher by deal number favorable market conditions for the IPO launches. NASDAQ, Shanghai and
compared with Q4 2019 and a 9% rise by proceeds. Q4 2020 also saw the highest Australia exchanges led by deal numbers in Q4 2020, accounting for 34% of
proceeds raised since Q4 2010, when 480 IPOs raised US$130.3b. global IPOs. Hong Kong and NASDAQ exchanges dominated by proceeds in
• October 2020 was the most active October for the last 20 years by deal numbers, with Q4 2020, accounting for 23% and 21% of the global IPO proceeds, respectively.
187 IPOs raising US$37.4b. With the US presidential election and new waves of the COVID- • Technology was the most dominant sector in Q4 2020, both by numbers (23%)
19 pandemic surfacing in many countries, November 2020 was relatively slow, with 94 IPOs and proceeds (35%). Health care (16% of deal numbers and 17% of proceeds)
raising US$22.0b. However, with the US presidential election concluded and a Brexit ranked second.
agreement reached, IPO activity picked up in December, with 209 IPOs raising US$42.0b.
Q4 2020 comparison
Global Americas Asia-Pacific EMEIA*
Number Proceeds Number Proceeds Number Proceeds Number Proceeds
▲ 30% ▲ 9% ▲ 62% ▲ 340% ▲ 5% ▲ 4% ▲ 97% ▼ 56%
600 $120 100 $35.1 $40 $36.6
$101.4 300
$50.3
$60 140 $40
$92.8 90 $48.2
500 $100 250 $50 120
80
$30 $30
70 100
400 $80 200 $40
60
80
300 $60 50 $20 150 $30 $16.0 $20
40 60
200 $40
30 $8.0 100 $20
40
$10 $10
20
100 $20 50 $10 20
378 490 10 58 94 255 268 65 128
0 $0 0 $0 0 $0 0 $0
Q4 19 Q4 20 Q4 19 Q4 20 Q4 19 Q4 20 Q4 19 Q4 20
Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b
*In Q4 2019, the largest-ever IPO (Saudi Aramco, which raised US$29.4b) was listed on the Saudi Tadawul in EMEIA. Excluding this listing, Q4 2020 proceeds would have shown a 122% increase compared with Q4 2019.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 4
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.
Global IPO market summary — 2020 review
Key highlights • IPOs provide an opportunity for high-growth companies to fund innovation and accelerate
• IPO investors enjoyed a good year as IPOs defied the negative impacts of the growth. For example, European COVID-19 vaccine makers BioNTech SE and CureVac NV went
COVID-19 pandemic. The IPO process and ecosystem have adapted to change public in October 2019 and August 2020, respectively. In Asia-Pacific, China’s BeiGene Ltd.
(e.g., virtual roadshows). Strong IPO activity demonstrates that the global (which is listed on NASDAQ and HKEx) helped to develop COVID-19 testing and treatment.
equity markets are resilient, open and working. For investors in today’s low Access to funding from capital markets is critical for these companies to make valuable
interest rate environment, equity investments offer a means to achieve higher contributions to society.
returns. • Post-IPO returns in 2020 remained high compared with 2019, suggesting there could be
• Global IPO numbers were up 19%, while proceeds increased 29% from 2019. more speculative investors chasing higher and faster returns, and more retail investors
2020 saw 1,363 IPOs with total proceeds of US$268.0b, the highest proceeds trading on the stock market. In the Americas, first-day average returns were 45.6%; current
since 2010, when US$290.2b was raised via 1,361 IPOs. average returns are 72.3%; in Asia-Pacific, first-day versus current average returns were
57.9% and 79.5%, respectively; and in EMEIA, first-day versus current average returns were
• In the Americas, 2020 IPO activity numbers and proceeds increased 30% and 5.2% and 16.6%, respectively.
78%, respectively. Asia-Pacific saw a 20% increase by deal numbers and a 45%
rise in proceeds. Meanwhile, EMEIA deal numbers rose by 7%, and proceeds • In 2020, the most active sectors were technology, industrials and health care, which
decreased by 43%, compared with 2019. accounted for 59% of global deals and 64% of proceeds.
Change on
2020 2019
Full-year comparison 2019
Global Americas Asia-Pacific EMEIA*
Number Proceeds Number Proceeds Number 1363
Proceeds Number Proceeds
▲ 19% ▲ 29% ▲ 30% ▲ 78% ▲ 20% ▲ 45% ▲ 7% ▼ 43%
1,600 $268.0 $300 300 $97.9 $120 900
$136.2 $160 300
$59.8 $70
1,400 800 $140 $60
$208.3 $250 250 $100
700
250
1,200 $120
$200 200 $80 600
$93.6 200
$50
1,000
$54.9 500
$100
$33.9 $40
800 $150 150 $60 $80 150
400 $30
600 $60
$100 100 $40 300 100
$20
400 $40
200
$50 50 $20 50 $10
200
1,146 1,363 217 282 100 686 822 $20
243 259
0 $0 0 $0 0 $0 0 $0
2019 2020 2019 2020 2019 2020 2019 2020
Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b
*In 2019, the largest-ever IPO (Saudi Aramco, which raised US$29.4b) was listed on the Saudi Tadawul in EMEIA. Excluding this listing, 2020 proceeds would have shown a 12% increase compared with 2019.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 5
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.
Americas and Asia-Pacific IPO markets maintain their momentum
• Across the Americas, 2020 IPO activity surpassed
2019 activity, rising 30% by deal number and 78% by Regional share by number of IPOs Regional share by IPO proceeds
proceeds, respectively, largely as a result of increased
activity in the US and Brazil markets.
• 2020 Asia-Pacific IPO activity increased 20% by deal 13%
21% 19% 23%
numbers and 45% by proceeds compared with 2019. 29% 30% 32% 29% 28%
34%
Despite an increase in cross-border activity, US-China
tensions have encouraged Mainland Chinese companies
to list closer to home and the Hong Kong market has been 51%
boosted by many US foreign private issuers (FPIs) that 60% 48%
60% 39% 45%
chose to complete a secondary listing outside of the US. 57% 49% 54%
59%
• In EMEIA, IPOs saw a rise of 7% by deal numbers and a
decline of 43% by proceeds compared with 2019. In Q4
2020, deal numbers increased 97% over Q4 2019, while 36%
27% 29% 27%
proceeds declined by 56%. The increase in deal numbers 19% 19% 21% 17%
12% 13%
reflects more medium-sized IPOs in Q4 2020, while the
decline in proceeds was due to the gigantic Saudi Aramco 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
IPO that took place in Q4 2019.
Americas Asia-Pacific EMEIA Figures may not total 100% due to rounding
Markets 2020 IPO activity Year-on-year comparison
1,800 $300 Number of IPOs Total IPO proceeds
1,600
Global Americas Asia-Pacific EMEIA 1,400
$250
100% 78%
1,200 $200 80%
45%
1,363 282 822 259 1,000
800
$150
60%
40% 19%
30%
20% 29%
7%
IPOs IPOs IPOs IPOs 600 $100
20%
0%
400
$50 -20%
$268.0b $97.9b $136.2b $33.9b 200
0 $0
-40%
-60%
-43%
Proceeds Proceeds Proceeds Proceeds 2016 2017 2018 2019 2020
Number of IPOs Proceeds US$b Global Americas Asia-Pacific EMEIA
All amounts in table are in US$
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 6
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Cross-border IPO activity improves; more companies consider SPACs
• Globally, 2020 saw a steady increase in cross-
border IPO activity (7.9% of global IPOs compared
with 8% in 2019 and 10% by proceeds compared with
2020 activity Stock Sectors IPOs
exchanges by number of largest by
7.1% in 2019), reflecting higher average deal size. Sources of IPOs by total proceeds IPOs proceeds ***
The top three active inbound exchanges were
NASDAQ and NYSE (63 IPOs in aggregate), and Hong 57% 56% 94% 94% 92% 93%
Kong (13 IPOs).
• The top three countries of origin were China (35
IPOs), Denmark (8 IPOs), and Malaysia (8 IPOs). NASDAQ Technology Semiconductor
Despite the US-China tensions, Chinese companies 43% 44% 6% 6% 8% 7% $55.3b 324 IPOs Manufacturing
still accounted for 33 out of 63 cross-border IPOs International Corp.
181 IPOs $89.1b
inbound into the US in 2020. Americas Americas APAC APAC EMEIA EMEIA $7.6b
2019 2020 2019 2020 2019 2020 Technology
• Private equity- (PE) and venture capital- (VC) backed STAR Market
Non-financial sponsor-backed
IPOs accounted for 14% of global IPOs by number and PE- and/or VC-backed Figures may not total 100% due to rounding July
33% by proceeds. In the US, the percentage of PE- and
VC-backed IPOs was significantly higher, representing Hong Kong Industrials JD.com, Inc.***
52% in deal numbers and 78% in proceeds. Cross-border IPOs Top countries of origin (HKEx and 243 IPOs $4.5b
2020 By number of IPOs outside home country
GEM) $31.4b Technology
• In 2020, 255 special purpose acquisition companies* • China (35)
(SPACs) were created globally, totaling US$81.5b. In $51.2b Hong Kong Main Board
2020 8% • Denmark (8) June
2020, there were more SPAC IPOs on US • Malaysia (8) 144 IPOs
exchanges than traditional IPOs (53% of all US IPOs • Singapore (7)
2019 8%
by deal number and 48% by proceeds). Merging with a • United Kingdom (7)
SPAC is an increasingly popular alternate route for Shanghai (SSE Health care Beijing-Shanghai
access to public markets. 2018 10% Top IPO destinations** and STAR) 235 IPOs High Speed
By number of IPOs
$49.6b Railway Co., Ltd.
• Follow-on offerings saw a rise of 25% by deal $50.4b
• NASDAQ (51) 233 IPOs $4.4b
numbers and 63% by proceeds in 2020 (5,140 deals 2017 7%
• Hong Kong (13) Industrials
raising US$724.7b), compared with 2019. Follow-on Shanghai Main Board
• NYSE (12)
activity is expected to continue its momentum in 2016 6% • Australia (10)
January
the first half of 2021 (H1 2021) as public companies • Norway (7)
take advantage of cheaper liquidity and an abundance
of capital in the market. Percentage by number of IPOs globally
**IPO destinations refer to stock exchanges (main and
junior markets).
***Company is now dual-listed on US
and Hong Kong exchanges. All amounts in table are in US$
*SPAC IPOs are excluded in the compilation of all data included in this report, except where indicated.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 7
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Global IPO market outlook
• Looking ahead, global IPO pipelines remain healthy. We expect IPO activity to sustain • Asia-Pacific: The IPO market trend remains positive for H1 2021. We expect IPO-bound companies in high-
its momentum going into H1 2021 as companies take advantage of ample liquidity and performing sectors (technology, health care and industrials) will continue to do well in 2021, including US FPIs
positive sentiment from the availability of new vaccines becoming available in most looking to complete secondary listing outside of the US. The speed of recovery from the expected disappointing
countries. An agreed Brexit deal will also favor the IPO market sentiments with more clarity 2020 reported earnings due in Q1 2021 will also affect the market sentiments going into H2 2021.
on the trade arrangements between EU and the UK going forward.
• EMEIA: With indices recovering much of their losses in early 2020, capital markets appear optimistic about 2021.
• However, IPO candidates should beware of a potential market correction. Equity prices, We expect the IPO market to sustain its H2 2020 momentum into H1 2021, with the caveat that many
which made significant advances in 2020, will be more exposed to any price correction if uncertainties remain.
market volatility increases in 2021. There is also uncertainty on the effectiveness of the
• Sector: Technology and health care IPOs, which excelled during the pandemic, will likely do well in 2021, as some
new vaccines to control further spread of the pandemic, which is critical for global
temporary consumer and workforce shifts become permanent and governments continue to allocate budgets to
economic recovery. Together with the proposed regulatory changes on IPO listing
health care resources. We also expect to see an increased focus on the renewables sector.
requirements in certain markets, we may see IPO candidates choose to complete their
listings while the transaction window remains open. • Cross-border listings on the US exchanges may slow down as a result of the Holding Foreign Companies
Accountable Act (HFCAA) passed by the US Congress in December 2020. The Act could remove overseas
• Until the pandemic is under control and hard-hit sectors, such as retail, aviation, travel and
companies from US exchanges if the Public Company Accounting Oversight Board (PCAOB) is not provided with
hospitality begin to recover, we anticipate H2 2021 to be more challenging than H1
access to financial audit-related documentation. The HFCAA also requires companies to establish that they are not
2021, as investors review their portfolios and reallocate among different asset classes.
owned or controlled by a foreign government. Foreign companies have three years to comply with the requirements
• Americas: Although the traditional IPO model had to adapt during the pandemic, IPO before facing the threat of losing access to US stock markets. The delisting of three mainland Chinese companies by
markets continue to be very active and show strong performance. We expect 2021 to be a the NYSE in January 2021 adds further regulatory uncertainty and risk for listing in the US market.
strong year for IPO-bound companies, with the continued evolution of the traditional IPO
model, growth in SPAC formations and direct listings.
c
IPO activity vs. MSCI World Index
3,000 161 2,583
2,690 200 Global equity index rose to
2,456
2,500
2,086 2,108 2,179
2,046
2,178 2,188 2,139 2,180 2,234 2,292 2,358
2,141 2,053
2,148 2,202
2,305 2,293
182
180
160
new highs at the end of
2,028
2,000
2,342 1,853 2,367 166 140 2020, while IPO activity
120
1,500 122
133
100
continued to climb,
116 113 112
1,000 96
104 80 demonstrating that equity
88 84 87 60
500
73
64 61 64 64 40 markets are resilient, open
51
43 47 45 45 40 20
and working.
0 0
Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sep 19 Oct 19 Nov 19 Dec 19 Jan 20 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Oct 20 Nov 20 Dec 20
Level of MSCI Number of IPOs
*MSCI World Index is composed of more than 1,500 constituents listed on stock exchanges of various developed markets. The index includes companies from 24 developed markets in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. The index constituents are weighted on the basis of free float market capitalization. MSCI World Index is reviewed on a quarterly basis and is managed by MSCI Inc. Number of IPOs shown
on this chart excludes all deals with proceeds below US$5m and SPACs.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 8
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Recommendations for IPO candidates
There are a variety of market factors that may impact investor sentiment for IPOs. Pre-IPO
Implications for IPO candidates companies should analyze how these factors may affect their business, timing and valuations.
IPO candidates looking to go public face uncertainties caused
by the continuing pandemic, underlying economic contraction
and financial market volatility. IPO candidates considering an
IPO will need to:
• Demonstrate business resilience with innovative
COVID-19
business models, supply chain agility and financial pandemic
strength, as well as a preparedness to live with the
impact of the pandemic for at least another 6 to 12
months. Market Regulatory
• Conduct extensive pre-marketing and pre-IPO volatility changes
funding to lower transaction risk and improve pricing
leverage with investors. Conduct virtual and shorter
Geopolitical
roadshows to limit market risk.
development
• Be aware of and consider the geopolitical risk and
changing regulatory environment. Need to place Recovery of
more focus on environment, social and governance Brexit underlying
(ESG) and diversity on company boards and implementation economic
management teams. activities
• Consider all options, from an alternative IPO process
(e.g., direct listing, merger with SPAC) to an
alternative financing method (e.g., private capital,
debt or trade sale). *Factors are presented in no specific order of priority.
Global IPO trends: Q4 2020 | Page 9Americas and US IPO market insights
In response to the COVID-19 pandemic,
the traditional IPO model evolves
“
Despite a volatile macroeconomic backdrop, 2020 has proven to be an exciting
year in the IPO market, with an evolution in what has historically been a
relatively standard model for companies to go public and with volumes not
seen since 2014. We anticipate continued innovation of the traditional IPOs,
along with SPACs and direct listings, to better align with issuer objectives. The
pipeline of companies looking to go public keeps building as stocks continue to
perform and investor appetite remains strong.
Rachel Gerring
EY Americas IPO Leader
Global IPO trends: Q4 2020 | Page 10Americas IPO market highlights
• Americas IPO activity maintained its momentum through Q4 2020, with 94 IPOs that raised
$35.1b in Q4 2020, an increase of 62% and 340%, respectively, from Q4 2019. Brazil’s B3 2020
30 $9
Change on 2019
• US exchanges accounted for the majority of IPOs in 2020, (79% by deal numbers and 88% by 25
$8
$7
proceeds). 28 IPOs ▲ 460%
20
15
$6
$5
$4
• The Brazil IPO market had a record year, with 28 IPOs raising US$8.5b in 2020, making it the 10 $3
most active year for Brazil by deal numbers and proceeds since 2007, as low interest rates led $8.5b proceeds ▲ 242% 5
$2
$1
0 $0
investors to the stock market. Signs of slowdown in Q4 2020 were mainly driven by volatility 2016 2017 2018 2019 2020
increase in global equity markets, as new waves of the COVID-19 pandemic emerged and the US Number of IPOs Proceeds US$b
presidential election created uncertainty. Still, 10 IPOs raised US$4b in Q4 2020 and a significant
number of issuers in the IPO pipeline are expected to execute throughout 2021.
• Health care IPOs continued to be robust, with 46% of deals in Q4 2020, followed by Canada’s Toronto Main and Venture Exchange
25 $3.0
technology with 24%. More than half of IPO proceeds in Q4 2020 were raised by technology Change on 2019
20 $2.5
companies (51%), followed by health care (31%).
12 IPOs
$2.0
▼ 25% 15
$1.5
10
$1.0
All amounts in table are in US$
$1.5b proceeds ▲ 227% 5
0
$0.5
$0.0
2020 activity 300 $120 IPO activity of Canadian Securities Exchange is excluded.
2016 2017
Number of IPOs
2018 2019 2020
Proceeds US$b
200 $80
Change on 2019
100 $40 Mexico’s Mexican Stock Exchange
282 IPOs ▲ 30%
0 $0 Change on 2019
10 $4
2016 2017 2018 2019 2020 8
$97.9b proceeds
$3
▲ 78% Number of IPOs Proceeds US$b 2 IPOs NA* 6
4
$2
$1.6b proceeds NA* 2 $1
Stock exchanges Sectors* IPOs 0
2016 2017 2018 2019 2020
$0
by total proceeds by number of IPOs by largest proceeds *There was no IPO activity on Mexican Stock Exchange in 2019 .
Number of IPOs Proceeds US$b
US NASDAQ Health care Snowflake Inc. September
$55.3b | 181 IPOs United States 114 IPOs | $27.9b $3.9b Technology, New York (NYSE) US’s NASDAQ and NYSE 250 $100
New York (NYSE) Technology Airbnb Inc. December Change on 2019 200 $80
$30.9b | 43 IPOs United States $3.8b Technology,
77 IPOs | $40.4b
224 IPOs
US NASDAQ 150 $60
▲ 33% 100 $40
Brazil B3 Industrials DoorDash Inc. December
$86.2b proceeds
50 $20
$8.5b | 28 IPOs Brazil ▲ 70%
19 IPOs | $8.0b $3.4b Technology, New York (NYSE) 0 $0
2016 2017 2018 2019 2020
*IPO activity of Canadian Securities Exchange is excluded from sector analysis. All amounts in table are in US$ Number of IPOs Proceeds US$b
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 11
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Americas — US IPO market highlights
• Despite the pandemic and macroeconomic uncertainties, US IPO
markets in 2020 were the most active since 2014 in both number of 2020 activity Change on
2019 Sectors IPOs
deals and proceeds, with 224 IPOs raising $86.2b. US IPO activity by number of IPOs largest by proceeds
remained strong until November 2020, when it paused for the US 224 IPOs ▲ 33%
presidential election and the end of the earnings season. Activity Snowflake Inc. NYSE
$86.2b proceeds ▲ 70% Health care $3.9b Technology September
resumed in December as markets climbed on news of an election 112 IPOs | $25.7b
outcome and positive COVID-19 vaccine reports. 52% of IPOs are financial Airbnb Inc. US NASDAQ
sponsor-backed $3.8b Technology December
• Health care companies dominated activity in 2020, accounting for
50% IPOs (112 IPOs). Technology issuers still garnered the most in funds Technology DoorDash Inc. NYSE
raised, accounting for 45% of total 2020 proceeds (US$38.7b raised by US NASDAQ New York (NYSE) 68 IPOs | $38.7b $3.4b Technology December
68 IPOs). $55.3b $30.9b Lufax Holding Ltd. NYSE
181 IPOs 43 IPOs
• SPACs became more mainstream in 2020. Although the traditional Consumer $2.7b Technology October
IPO is still an optimal path for many companies, SPACs continue to gain 250 $100 products Royalty Pharma plc US NASDAQ
popularity, in part for their speed and deal certainty, as companies weigh 200 $80 9 IPOs | $3.0b $2.5b Health care June
different options to going public. 150 $60 All amounts in table are in US$
• Despite the resurgence of the COVID-19 pandemic in the US, the S&P 100 $40
500, the Dow Jones Industrial Average and the NASDAQ Composite 50 $20
Performance 2020
closed at record highs in Q4 2020. 0 $0
2016 2017 2018 2019 2020
IPO pricing and performance
Outlook Number of IPOs Proceeds US$b
First-day Share price performance since
• Momentum in SPAC activity remains strong, and companies will US average return IPO (aka offer-to-current)
Cross-border IPOs markets
continue to explore options between traditional IPOs and other
alternatives. top countries/regions of origin 2020 + or – indicates
+34.5% +72.6%
change compared First-day and current average returns are mean returns of issuers who started
• Even as the IPO model evolves, IPO markets continue to be aggressive with offer price at IPO trading by 31 December 2020
63
Greater China
and show strong performance. This builds a promising backdrop for 33 IPOs ($13.1b) Equity indices Volatility index
2021, as companies have more options to choose from to meet their
transaction goals. CBOE VIX®
IPOs Canada DJIA S&P NASDAQ
6 IPOs ($2.5b) Composite 22.8 current
• Direct listings have always attracted attention from corporates and their +7.2% 500 29.3 YTD average
owners, but the rule change in December permitting companies to +16.3% +43.6% 17.5 10-year average
raise capital alongside a direct listing will magnify this considerably.
All amounts in table are in US$ + or – indicates change since 31 December 2019 Current index level is for 31 December 2020
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 12
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Americas — US IPO market: strong first-day returns will continue to appeal to more potential IPO investors
4,000 Last 10 years S&P 500 Last 10 years CBOE VIX Index
90
3,500
80
3,000
70
2,500 60
2,000 50
40
1,500
30
1,000
20
500 10
0 0
2020 monthly number of IPOs vs. VIX Index Average first-day returns of IPOs (%)
90 45 40%
39 35%
80 40 35%
70 32 35
30%
29 29
60 26 30 25%
50 23 25
20% 17% 17%
40 20 15% 16%
14%
15% 13% 13%
30 12 15 12%
10%
10 10
20 8 10 10%
4
10 2 5 5%
0 0 0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Number of IPOs CBOE VIX
US equity markets climbed to new highs by the end of 2020. Strong share price performance will fuel robust investor appetite in H1 2021. Starting IPO
readiness preparations early provides maximum flexibility for IPO candidates to respond to evolving market conditions.
Source of IPO data: Dealogic, EY. Source of S&P 500 and CBOE VIX Index: S&P Capital IQ. S&P 500 and CBOE VIX indices shown are daily figures.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 13
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Special purpose acquisition companies (SPACs) — IPO market insight
SPACs continue to be an attractive
liquidity option
“
Activity in the SPAC market accelerated through the end of
2020 and momentum remains strong. SPACs are here to stay,
filling the needs of companies that are ready to go public and
want to move more quickly than the traditional IPO. With a
tremendous amount of cash placed in SPAC trusts and the
strong private investment in public equity (PIPE) market,
mergers will continue to be announced with companies across
various sectors.
Karim Amani
EY Americas SPAC Leader
Global IPO trends: Q4 2020 | Page 14US SPAC highlights
• 2020 was a record-breaking year for SPAC IPOs, as 248 IPOs raised
US$80.9b, compared with 60 IPOs for US$13.7b in 2019. 2020 US SPAC IPO activity
• In Q4 2020, there were more SPAC IPOs on US exchanges than 2020 Change on 2019 300 $100
traditional IPOs. By proceeds, SPAC IPOs accounted for 55% of US total 250 $80
IPO proceeds during the same period. 248 313%
200
150
$60
• There were 64 SPAC acquisitions completed during 2020, with a total IPOs
100
$40
acquisition value of US$85.3b. In Q4 2020 alone, total acquisition value
reached US$54.3b, more than doubling previous full-year values.
$80.9b 491%
50
0
$20
$0
proceeds
2016 2017 2018 2019 2020
• Recently, the SPAC market has been operating with tremendous efficiency Number of SPAC IPOs Proceeds US$b
and the liquidity alternative for many companies is attractive.
• SPACs are filling a funding need for companies that are ready to go SPAC IPOs by % of all US IPO activity Completed US SPAC acquisitions
public and want to move more quickly than the traditional IPO route 100% 100% 70 $100
offers. 80%
90% 84% 81% 74% 47%
80%
86% 80% 83% 79% 52% 60
$80
50
60% 60% 40 $60
30
Outlook
40% 40% $40
20
20% 20% $20
10% 16% 19% 26% 53% 14% 20% 17% 21% 48% 10
0% 0 $0
• Momentum in the SPAC market is expected to remain strong in 2021 0%
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
as more new SPACs are in the public pipeline every month, with many Number of traditional IPOs Proceeds from traditional IPOs Number of completed SPAC acquisitions
more behind them. Number of SPAC IPOs Proceeds from SPAC IPOs Total acquisition value US$b
• There has been a tremendous amount of cash placed in SPAC trusts, Selected 2020 completed US SPAC acquisitions
especially from the beginning of H2 2020. There are 228 active SPACs, SPAC name Target
Deal value
Sponsor
Acquisition
US$b sector
with nearly US$75b in trust, as of the end of December 2020. As a result, Churchill Sponsor III LLC, M.
Churchill Capital Corp. III MultiPlan, Inc. 11.1 Health care
there will likely be more announced SPAC mergers and new public Klein and Company, LLC
market entrants from SPAC mergers in 2021 and 2022 than ever Conyers Park II Acquisition Corp. Advantage Solutions 5.2
Conyers Park II Sponsor LLC,
Consumer
Centerview Capital
before. Social Capital Hedosophia Holdings Opendoor
4.8 SCH Sponsor II, LLC Technology
• Post-SPAC merger companies will need to perform relative to their Corp. II Technologies, Inc.
projections just like any other public company, which is not always a Vivint Smart Home,
Mosaic Acquisition Corp. 4.2 Fortress Investment Group LLC Consumer
straightforward exercise for early stage businesses. The performance of Inc.
these companies may affect the future of the SPAC market and could Flying Eagle Acquisition Corp. Skillz Inc. 3.5 Eagle Equity Partners II, LLC Consumer
result in a pause in SPAC funding. All amounts in table are in US$ Source: SPAC Research, SEC filings Figures may not total 100% due to rounding
*SPAC
All IPOs
values arein thisunless
US$ context refer also
otherwise to ex-business
noted. 2020 refersdevelopment and
to the full year ofblank
2020check companies
and covers but exclude
completed Capital
IPOs from Pool IPOs.
1 January 2020SPAC
to 31IPO deal numbers
December and2020
2020. Q4 proceeds on 20
and Q4 thisrefer
pagetoare
theexcluded from other
fourth quarter parts
of 2020 andofcover
the Global IPO trends: Q4 2020 report (pages 1-13, 16-29 and
Global IPO trends: Q4 2020 | Page 15
appendices).
completed All from
IPOs values1are US$ unless
October 2020otherwise noted. 2020
to 31 December 2020.refers
Datato asthe full year
of COB of 20202021.
3 January and covers completed SPAC IPOs from 1 January 2020 to 31 December 2020. Data as of COB 3 January 2021.Asia-Pacific
The COVID-19 pandemic leaves a deep scar,
but Asia-Pacific IPO markets prove resilient
“
The COVID-19 pandemic has been the overwhelmingly dominant event of
2020. Few thought people or economies would suffer this long. Yet, somehow,
despite this crisis, the Asia-Pacific IPO market proved resilient. Looking ahead,
IPO candidates will need to continue to take the necessary precautions to
maintain their liquidity. That said, IPO companies, and new economy
companies especially, have proven their importance to the economy and their
ability to pivot, adapt and prosper in response to the pandemic.
Ringo Choi
EY Asia-Pacific IPO Leader
Global IPO trends: Q4 2020 | Page 16Asia-Pacific IPO market highlights
• Asia-Pacific IPO activity in 2020 surpassed 2019 (20% by deal numbers and 45% by
proceeds). Some of this rise in activity can be attributed to a particularly active H2 2020.
Q4 2020 IPO activity remained steady, with deal numbers rising 5% and proceeds 2020 activity Stock Sectors IPOs
exchanges by number of largest by
increasing 4% compared with Q4 2019. 2020 saw the highest proceeds since 2010. Change on
by total proceeds IPOs proceeds
2020 2019
• With the US presidential election over, there is renewed optimism that a new
administration may soften its stance around possible new regulatory requirements for 822 ▲ 20%
Chinese companies listed on US exchanges. IPOs
• In Greater China, Q4 2020 numbers rose slightly — 2% by deal numbers and 3% by $136.2b ▲ 45% Hong Kong Industrials Semiconductor
proceeds — compared with Q4 2019. Despite the COVID-19 pandemic, 2020 deal Proceeds (HKEx and GEM) 181 IPOs Manufacturing
numbers increased 47% compared with 2019, while proceeds rose by 55%. 2020 $51.2b $20.8b International
Corp.
proceeds (US$119.1b via 536 IPOs) is highest since 2010 (US$135.1b, 433 IPOs). IPO activity 144 IPOs
$7.6b
• In Japan, its startup ecosystem continued to drive growth in Q4 2020. In 2020, 93 IPOs
1200 $160 Technology
raised proceeds of US$3.3b on Japan exchanges, 4% higher by deal numbers and 13% STAR Market
$140
lower in proceeds than 2019. 1000
$120 July
800
• In Australia and New Zealand, Q4 2020 saw a flurry of IPO activity with a rise of 150% $100
600 $80
by deal numbers and 139% by proceeds compared with Q4 2019. 2020 IPO activity rose Shanghai (Main Technology JD.com, Inc.*
$60
49% by deal numbers and 50% in funds raised compared with 2019. 400
Board and STAR $4.5b
$40 180 IPOs
200 Market) Technology
• In ASEAN, 2020 IPO activity saw a modest decline in numbers (13%) and funds raised $20
$38.7b
(5%) compared with 2019. However, it saw two notable IPOs of US$1b or more in the
0 $0 $49.6b Hong Kong
2016 2017 2018 2019 2020
Main Board
year: Central Retail Corp. plc (US$2.3b) and SCG Packaging plc (US$1.3b) in Thailand. Number of IPOs Proceeds US$b 233 IPOs
June
Q4 2020 IPO activity was lower by deal numbers (15%) and proceeds (20%) compared
with Q4 2019.
• In South Korea, Big Hit Entertainment Co. Ltd. went public in October 2020 with
Cross-border IPOs Shenzhen (Main Materials Beijing-Shanghai
top countries/regions of origin Board, SME and 95 IPOs High Speed
proceeds of US$822m. In 2020, South Korea had six IPOs with total proceeds of Railway Co., Ltd.
ChiNext) $7.4b
US$2.3b, a decline of 89% by numbers and 4% by funds raised compared with 2019. Malaysia
$18.3b $4.4b
26
8 IPOs ($130m)
• Technology remained the hot sector in Q4 2020, accounting for 21% of Asia-Pacific 159 IPOs Industrials
deal numbers and proceeds, followed by the industrials sector with 10% of proceeds. A Singapore Shanghai Main Board
7 IPOs ($91m) January
similar trend was also observed for the full year in 2020, with industrials and technology IPOs
being the most active sectors by deal numbers, and technology dominating by proceeds. New Zealand
5 IPOs ($164m)
*Company is now dual-listed on US and All amounts in table are in US$
All amounts in table are in US$ Hong Kong exchanges.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 17
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Asia-Pacific IPO market outlook
• The COVID-19 pandemic has left a scar on Asia-Pacific economies. Companies in sectors that have
performed well throughout the crisis have healed investor sentiment. IPO-bound companies in high-
performing sectors (technology, industrials and health care) will be well received in the markets in c
2021. For IPO candidates in heavily impacted sectors, the wound is still deep, and they will continue to
find it hard to raise money until the economy rebounds.
Asia-Pacific has been making a better
• Overall, we expect more companies to go public in 2021. IPO-bound companies need to raise funds to
expand, acquire and protect their business. The IPO market outlook remains positive for H1 2021, but recovery from the pandemic and it
we anticipate a slowdown in H2 2021 as heavily impacted sectors are expected to report on should continue to spearhead the global
disappointing 2020 results that may dampen investor sentiment. IPO activity in 2021. The US-China
• In Greater China, market reforms and active government policies have opened a transaction window for relationship and regulatory development
IPO candidates. We expect Hong Kong IPO activities to remain active in 2021 as there should be a will affect the cross-border IPO
continued influx of secondary listings of US-listed Chinese companies on the HKEx. In Mainland China, an transactions going outbound from the
abundance of liquidity and a further roll out of the registration-based system to other exchanges will
promote IPO activity in 2021. region, and also the number of US FPIs
• In Japan, the government’s 2021 initiative to create a new digital agency focused on digitalization that may contemplate for a secondary
creates ideal conditions for a wave of technology and new economy startup companies to come to listing back into the region.
market in 2021. A successful Tokyo Olympic Games will further boost the country’s economic activities.
• In Australia and New Zealand, the IPO market outlook continues to improve for H1 2021, with more
IPOs from small-cap companies expected. Companies that demonstrated resilient business models during
the COVID-19 pandemic, such as health and e-commerce sectors, and those exhibiting a strong growth
story and a reason for listing, are likely to be successful in going public.
• In ASEAN, Q3 2020 and Q4 2020 recorded a steady number of IPOs (33 and 34 IPOs, respectively).
However, proceeds rose significantly (US$1.1b in Q3 2020 to US$3.3b in Q4 2020), due to a rise in
average deal size. This could signal the return in 2021 of more medium-sized IPOs, rather than just
small-cap IPOs.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 18
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Asia-Pacific IPO market: good first-day returns in selected IPOs continue to attract retail investors’ interests despite
market volatility
Annual IPO activity Quarterly IPO activity
1200 350
969 286
1000 300 273 268
822 248 252 255
250 225 219
800 673 677 648 676 686 199
560 200 176 167 177 167
600 156
435 133 139
373 150 104 120 125
112
400
100
200 50
0 0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Average first-day returns of IPOs (%) Valuation and risk
70% 35,000 70
58%
60% 30,000 60
25,000 50
50%
20,000 40
40%
15,000 30
30%
27%
25% 23%
21% 19%
10,000 20
20% 15% 5,000 10
11%
8% 7%
10% 0 0
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Oct-15
Oct-16
Oct-17
Oct-18
Oct-19
Oct-20
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Apr-15
Apr-16
Apr-17
Apr-18
Apr-19
Apr-20
0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Hang Seng Index (HSI) HSI Volatility Index
As 2020 saw IPO activity at the second highest level, and average first-day returns more than doubled the previous high recorded in the last 10 years,
there are signs of bubbles and speculations with more retail investors entering into the stock markets. Any signs of market uneasiness can exaggerate
the volatility.
Source of IPO data: Dealogic, EY. Source of Hang Seng Index (HSI) and HSI Volatility Index: S&P Capital IQ. Hang Seng and HSI Volatility indices shown are daily figures.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 19
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Asia-Pacific — Mainland China and Hong Kong IPO market insight
Greater China IPO activity in 2020 reaches
record levels
“
Greater China IPO activity remained robust in 2020 despite the negative
impact of the COVID-19 pandemic. The A-share market has been
boosted by the adoption of the registration-based system on the ChiNext
exchange in 2020, after its successful introduction in 2019 when the
STAR Market was launched. This system is expected to be extended to
the Shanghai Main Board and the Shenzhen SME Board in 2021,
marking an important milestone for the A-share capital market. In Hong
Kong, secondary listings of US-listed Chinese companies have pushed
up total proceeds – a trend we expect will continue in 2021.
Terence Ho
EY Greater China IPO Leader
Global IPO trends: Q4 2020 | Page 20Asia-Pacific — Mainland China and Hong Kong IPO market highlights
• Despite the COVID-19 pandemic, Greater China
exchanges’ deal numbers in 2020 increased by 47%
2020 top 5 IPOs
Hong Kong includes both listings on the Mainboard and Growth Enterprise Market (GEM).
2020 activity
Shenzhen includes listings on the Mainboard, Small and Medium Enterprise board and ChiNext.
compared with 2019, while proceeds rose 55%. All amounts in table are in US$.
Moreover, 2020 activity saw the highest proceeds Hong Kong (Main Board Shanghai (Main Board Shenzhen (Main Board, IPOs
(US$119.1b via 536 IPOs) on Greater China and GEM) and STAR Market)Change on SME and ChiNext) largest by proceeds
exchanges since 2010 (US$135.1b via 433 IPOs). Change on
2020 2020
Change on
2020 2019 2019 2019 Semiconductor
• Greater China accounted for three of the top five Manufacturing
exchanges globally by deal numbers and proceeds in 144 ▼ 11% 233 ▲ 89% 159 ▲ 106% International Corp.
IPOs IPOs IPOs
2020. By sector, industrials once again dominated by $7.6b
deal numbers (27%) in 2020 while technology
dominated by proceeds (30%).
$51.2b ▲ 27% $49.6b ▲ 83% $18.3b ▲ 97%
Technology
STAR Market
proceeds proceeds proceeds July
• In Hong Kong, 2020 IPO activity saw an 11% decline in
JD.com, Inc.*
deal numbers compared with 2019 because of the 250 $60 250 $60 250 $20
$4.5b
negative impact of the COVID-19 pandemic. However, $50 $50 Technology
an uptick in secondary listings by US-listed Chinese 200 200 200
$15
Hong Kong Main Board
$40 $40
companies on the Hong Kong Stock Exchange pushed 150 150 150 June
$30 $30
2020 proceeds 27% above 2019 levels. The technology 100 100 100
$10
Beijing-Shanghai High
sector had 18 IPOs and raised US$15.9b, which is $20 $20
$5 Speed Railway Co., Ltd.
50 50
the largest sector by proceeds. $10 $10 50
$4.4b
0 $0 0 $0
• Investor sentiment remained positive in Q4 2020,
0 $0
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Industrials
2016 2017 2018 2019 2020
Shanghai Main Board
but returned to more rational levels. The average first- Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b Number of IPOs Proceeds US$b
January
day returns of newly listed companies on the Hong
Kong Main Board in Q4 2020 was 19.7% versus 27.4% Sectors Sectors Sectors JD Health
in Q3 2020. by number of IPOs by number of IPOs by number of IPOs $4.0b
Technology
• In Mainland China, 2020 deal numbers and proceeds Industrials Industrials Industrials Hong Kong Main Board
surged well ahead of 2019 totals. The surge was largely 27 IPOs | $1.5b 61 IPOs | $11.9b 58 IPOs | $5.7b December
because of the STAR Market, which has attracted many
Real estate Technology Technology NetEase Inc.*
technology companies since its launch in July 2019, 24 IPOs | $10.9b 57 IPOs | $17.2b 31 IPOs | $2.5b
and the move by the ChiNext to become registration- $3.1b
Technology
based since July 2020. With 2020 proceeds reaching Health care Health care Materials Hong Kong Main Board
21 IPOs | $8.6b 40 IPOs | $7.3b 24 IPOs | $2.3b
US$67.9b, total funds raised for the year exceeded June *Company is now dual-listed on
the 20-year high set in 2010 (US$61.5b). US and Hong Kong exchanges.
All amounts in table are in US$
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 21
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Asia-Pacific — Mainland China and Hong Kong IPO market outlook
• The Hong Kong Stock Exchange is proposing to increase the profit requirement
for listed companies by 150% to 200% . The reform focuses on the profitability vs. September
IPO pipeline
level of IPO candidates to align with the increase in market capitalization 2020
requirements introduced in 2018. The consultation period for the proposed reform
ends on 1 February 2021. Depending on the outcome, the new reform may force companies are in the China
some IPO candidates to choose the GEM Board for their listing.
• We expect Hong Kong IPO activities to remain active in 2021 and a small increase in
193 Securities Regulatory
Commission (CSRC) pipeline
214
listings in H1 2021 on the HKEx. It remains to be seen how the new proposed
reform will be finalized, and how it will impact smaller to medium-sized companies
110 147
that may not be able to meet the new track record profit requirements as currently companies have submitted
proposed.
public filings with HKEx
• In Mainland China, we expect an abundance of liquidity and the rollout of the
registration-based system to the Shanghai Main Board and the Shenzhen SME
246 226
Board to further promote IPO activity in 2021. We also anticipate a number of companies are in the
unicorn IPOs in 2021.
STAR Market pipeline
• Although much has been made of the proposed regulatory changes for Chinese and
other overseas companies listed on the US exchanges, a review of Chinese company
455 354
listings on the US exchanges for H2 2020 and H2 2019 reveals that proceeds were companies are in the
452% higher and deal numbers rose by 13% in 2020. While the HFCAA may be a
topical issue for politicians, investors seem relatively unconcerned. How this may ChiNext pipeline
affect the issuer’s choice of IPO destination will depend on the policy
development under the new US administration.
• Across Greater China, market reforms and active government policies have opened
a transaction window for IPO candidates. Chinese companies looking to go public
in the next 6 to 12 months should understand and take full advantage of these
policies. IPO-bound companies in 2021 will also want to instil a governance culture
that promotes transparency and accurate disclosures. The new registration-based
system places a high priority on these attributes. Companies will want to be well-
prepared to avoid any last-minute setbacks.
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 22
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Asia-Pacific — Japan IPO market insight
Japan IPO markets shake off the
worst of the COVID-19 pandemic
“
IPO markets in Japan continued to gain momentum in Q4 2020, having
recovered from the worst of the COVID-19 pandemic. With the
government’s intention to stay on course with Abenomics under Japan’s
new leader and with the administration’s support of startups, we expect
IPO activity to sustain its surge into the first half of 2021.
Masato Saito
EY Japan IPO Leader
Global IPO trends: Q4 2020 | Page 23Asia-Pacific — Japan IPO market highlights
• Japan’s startup ecosystem continued to drive growth and stimulate IPO markets in Q4 2020.
Technology companies maintained their dominance in Japan IPO activity by deal numbers and 2020 activity Sectors IPOs
proceeds in both Q4 2020 and 2020 full year. Consumer products ranked second by deal numbers and Change on by number of largest by
2020
proceeds for Q4 2020 and 2020. Other businesses, such as those in the retail sector, continued to 2019 IPOs proceeds
face the negative effects of the pandemic. 93 ▲ 4%
• Q4 2020 IPO activity continued its rebound from earlier in 2020. Q4 2020 saw a rise of 95% by IPOs Technology Yukiguni Maitake
deal numbers and 170% increase by proceeds compared with Q3 2020, while Q4 2020 continued to 43 IPOs Co., Ltd.
improve from the early days of the COVID-19 pandemic. Quarter-on-quarter, Q4 2020 saw a modest
$3.3b ▼ 13%
$1.2b $410m
proceeds Consumer staples
rise of 8% by deal number while proceeds remained flat. Tokyo (First Section)
• During 2020, there were 93 IPOs with total proceeds of US$3.3b on Japan exchanges, 4% higher by Tokyo (First Section,
September
deal numbers, but 13% lower in proceeds than 2019 due to smaller average deal sizes. Second Section) and
• Japan exchanges ranked fifth among the top 12 global exchanges by deal numbers in 2020. PRO Market
• The Tokyo Stock Exchange continues its course to integrate its five markets into three markets (Prime,
25 $25
Consumer Roland Corp.
products $358m
Standard and Growth). 20 $20
25 IPOs Consumer products
Outlook
15 $15
Tokyo (First Section)
$1.2b December
10 $10
• The new administration’s pledge to create a new digital agency in 2021 focused on digitalization 5 $5
creates ideal conditions for a wave of technology and new economy startup companies to come to
0 $0
the public market in 2021 and beyond. A successful Tokyo Olympic Games can further boost the 2016 2017 2018 2019 2020
economic confidence, and vice versa.
• Japanese IPO candidates looking to complete their IPOs in the next 6 to 12 months will want to JASDAQ and MOTHERS
80 $3.0 Industrials Direct Marketing
maintain a course of growing revenues, strengthening compliance activities and demonstrating 78 8 IPOs MiX Inc.
$2.5
their resilience in the current economic environment. 76
$115m $228m
74 $2.0
Consumer products
72
70
$1.5 Tokyo (First Section)
68 $1.0
October
66
$0.5
64
62 $0.0
2016 2017 2018 2019 2020
Number of IPOs Proceeds US$b
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 24
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Europe, Middle East, India and Africa
More EMEIA IPO-bound companies leaped
through the open IPO window in Q4 2020
“
Despite the impact of the pandemic, EMEIA IPO markets proved resilient and
adaptive. After a period of high volatility and unusual uncertainties, we saw a
strong rebound of IPO activity in Q4 2020, resulting in higher 2020 IPO activity
than 2019. With continued momentum, expected vaccine success, high valuation
and lower volatility levels, everything is in place for a strong start to 2021. IPO
candidates will need to demonstrate resilience and rise to the level of ESG
standards that investors are expecting.
Dr. Martin Steinbach
EY EMEIA IPO Leader
Global IPO trends: Q4 2020 | Page 25Europe, Middle East, India and Africa IPO market highlights
• During 2020, EMEIA saw a rise of 7% by deal numbers but 43% decline by proceeds
compared with 2019. The notable decline is due to the US$29.4b Saudi Aramco IPO in 2020 activity Stock Sectors IPOs
December 2019, which was the largest IPO on record. With this deal excluded, 2020 saw Change on exchanges by number of largest by
a 12% increase in proceeds compared with 2019. 2020 2019 by proceeds IPOs proceeds
• Despite a second wave of the COVID-19 pandemic, EMEIA continued to gain
momentum in Q4 2020, with deal numbers increasing 97% over Q4 2019, but 259 ▲ 7%
IPOs
proceeds declined by 56% due to higher number of medium-sized IPOs. Again, Q4 2020
proceeds would rise by 122% with the exclusion of the Saudi Aramco IPO in the Q4 2019
figures.
$33.9b ▼ 43%
London (Main Technology JDE Peet's NV
proceeds
and AIM) 67 IPOs $2.9b
• Technology (including eCommerce), industrials and health care, as well as other Consumer
sectors that have indirectly benefited from the pandemic, thrived in 2020. For EMEIA $11.7b $10.0b staples
technology and biotech companies, IPOs remain an opportunity to fund innovation and
Main markets 30 IPOs Euronext (Amsterdam)
250 $80 May
accelerate growth. For example, European COVID-19 vaccine makers BioNTech SE and
CureVac NV went public in October 2019 and August 2020, respectively. 200
$60
• EMEIA accounted for 4 of the top 12 exchanges by deal numbers in 2020: NASDAQ OMX, 150
National (NSE Industrials Allegro.eu SA
Indian exchanges, Oslo Bors and London. EMEIA also saw 4 exchanges among the top 12 $40
by proceeds: London, Indian exchanges, Oslo Bors and Euronext. 100 and SME) and 43 IPOs $2.7b
Bombay (BSE Technology
• In Europe, IPO activity continued along a positive trajectory, with Q4 2020 numbers 50
$20
and SME)
$2.6b Warsaw Main Market
increasing 115%, while proceeds improved 122% over Q4 2019. 2020 deal numbers $4.1b October
were 23% higher than 2019, while proceeds rose by 9%. Europe also saw four mega IPOs 0
2016 2017 2018 2019 2020
$0
43 IPOs
in Q4 2020 (including two from the UK as described below).
Junior markets
• In the UK, IPO activity in Q4 2020 maintained the momentum it had gained in Q3 2020, 350 $7.0
Oslo Bors Health care THG Holdings
with two mega IPOs. Overall, 2020 deal numbers rose by 30%, while proceeds increased plc
by 56% compared with 2019.
300 $6.0
and Axess 28 IPOs
250 $5.0
$3.4b $2.4b
• MENA IPO activity rose 59% by deal numbers but proceeds fell by 93% in 2020 compared $2.6b Technology
with 2019. By proceeds, Saudi Tadawul saw four IPOs that raised US$1.4b in 2020, while
200 $4.0
42 IPOs London (Main Market)
150 $3.0 September
the Tel Aviv Exchange saw 17 IPOs with total proceeds of US$819m.
100 $2.0
• In India, the momentum gained in Q3 2020 continued into Q4 2020 as 19 IPOs
50 $1.0
launched on Indian exchanges with proceeds totaling US$1.8b. However, 2020 deal
numbers declined 33% as compared with 2019, while proceeds increased 61%. 0
2016 2017 2018 2019 2020
$0.0
All amounts in table are in US$
Number of IPOs Proceeds US$b
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 26
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.Europe, Middle East, India and Africa IPO market outlook
Europe IPO snapshot
• With continued momentum from Q4 2020, expected vaccine success,
high valuation and lower volatility levels, everything is in place for a Markets Activity 2020
strong start to 2021. Additionally, with the US presidential election
decided and BREXIT negotiated, market sentiment across EMEIA Change on Change on Sectors
2020 2019 2020 2019 by number of IPOs
appears more positive.
• Yet, even as volatility declines and hope rises, many uncertainties 185 ▲ 23% $27.4b ▲ 9% Technology
60 IPOs | $9.6b
remain as we look ahead to 2021. Trends toward remote working, IPOs proceeds
online shopping and a virtual IPO journey suggest that we will not be Industrials
8% of IPOs are 32% of IPOs are
30 IPOs | $2.4b
returning to the normal we once knew. In the new world order, financial sponsor-backed financial sponsor-backed
companies and sectors that benefited during the pandemic will likely All amounts in table are in US$
Health care
to continue to thrive, while those that have struggled may have to 24 IPOs | $1.1b
reimagine their business models for a world of less business travel,
Main markets Junior markets IPOs
smaller commercial real estate footprints and greater virtual largest by proceeds
Change on Change on
interaction. IPO candidates will need to demonstrate resilience and 2020 2019 2020 2019
JDE Peet's NV
elevate their ESG standards to meet investor expectations. Euronext (Amsterdam)
• In Europe, improving investor sentiment and a healthy IPO pipeline
61 ▼ 3% 124 ▲ 41%
$2.9b Consumer staples May
IPOs IPOs Allegro.eu SA
bodes well for higher IPO activity levels in 2021 as IPO-bound $2.7b
Warsaw (Main Market)
$23.6b $3.8b
Technology October
companies that stood on the sidelines in 2020 take advantage of the ▲ 2% ▲ 94%
proceeds proceeds THG Holdings plc
open IPO window in 2021. That said, IPO candidates will have to keep London (Main Market)
$2.4b Technology September
a close eye on emerging trends in Europe, including the Green Deal, 160 $70 160 $6
rising taxes and supply chain independence. 140 140 Stock exchanges
$60 $5
• In the UK, there is cause for cautious optimism in the IPO markets in 120
$50
120 by total proceeds
$4
2021, and especially cross-border activity as foreign companies look 100
$40
100
London (Main and AIM)
to take advantage of high liquidity levels in the London markets. With 80
$30
80 $3
$11.7b | 30 IPOs UK
clarity around the future relationship with Europe, confidence is 60 60
$2
Oslo Bors and Axess
$20
building, but at the same time, we still expect some risks and volatility 40 40
$1
$3.4b | 42 IPOs Norway
$10
in Q1 2021 as the US navigates a transition of power following the US 20 20
Euronext and Alternext
presidential election. 0 $0 0 $0
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 $3.3b | 11 IPOs Netherlands, France,
Belgium, Portugal
Number of IPOs Proceeds US$b
All amounts in table are in US$
All values are US$ unless otherwise noted. 2020 refers to the full year of 2020 and covers completed IPOs from 1 January 2020 to 31 December 2020. Q4 2020 and Q4 20 refer to the fourth quarter of 2020 and cover Global IPO trends: Q4 2020 | Page 27
completed IPOs from 1 October 2020 to 31 December 2020. Data as of COB 3 January 2021.You can also read
