Tech, Media and Telecom IPO Themes - Thematic Research
In 2020, 323 tech, media, and telecom (TMT) companies completed IPOs. Total proceeds stood at $96.8bn, up by 67% from the level in 2019. The US again dominated the market, accounting for 61% of total IPO proceeds.
- Between 1 January 2018 and 31 December 2020, a clear trend has emerged in the TMT sector's IPO market. Mature technologies like ecommerce and mobile have been associated with the most successful capital raisings. Measured by IPO proceeds, these themes accounted for almost half of the total TMT IPO market proceeds.
- Cutting edge technologies like fintech, cloud, and the internet of things (IoT) have been moderately successful in raising capital.
- By contrast, early stage technologies like 3D printing, blockchain, and quantum computing have been distinctly unsuccessful in attracting capital through equity listings.
- This report provides an overview of initial public offering (IPO) activity in the global TMT market between 1 January 2018 and 31 December 2020.
- It assesses the impact of COVID-19 on the TMT IPO market.
- It identifies the top 10 themes driving TMT IPOs during the identified period. These include ecommerce, mobile, fintech, cloud, and the Internet of Things (IoT).
- 2020 saw significant challenges and uncertainties for financial markets. The two largest economies were already locked in a trade war, and the world was then hit by a global pandemic, for which most countries were poorly prepared.
- The global economy falling into recession and the impact of the US presidential election made the outlook even more uncertain. These economic and geopolitical factors had an impact on the initial public offering (IPO) market for the tech, media, and telecom (TMT) sector.
- This report analyzes TMT IPO activity in 2020, compares it against 2018 and 2019, and provides an outlook for 2021.
Top 10 themes driving TMT IPOs
Deal selection methodology
Shanghai Holy Star Info Tech
Anker Innovations Technology
Airtel Africa PLC
China Tower Corp Ltd
The Hut Group
KE Holdings Inc.
Alibaba Group Holding
Uber Technologies Inc
Network International Holdings
Tradeweb Markets Inc
Ming Yuan Cloud
Beijing Kingsoft Office Software Inc
Softwareone Holding AG
Ceridian HCM Holding Inc
Maxvision Technology Corp
China Resources Microelectronics
Appotronics Corp Ltd
Foxconn Industrial Internet Co Ltd
American Well (Amwell)
1LIFE HEALTHCARE INC.
Health Catalyst Inc
Livongo Health Inc
Change Healthcare Inc
Good doctor (Ping An Healthcare And Technology Co Ltd)
China Mobile Games & Entertainment Group Ltd (CMGE Technology)
Codemasters Group Holdings Plc
Fujian Foxit Software Development Joint Stock
Warner Music Group Corp.
Three’s Company Media Group
China Bright Culture Group
Nitro Software Inc
Hitevision Co Ltd
Tencent Music Entertainment Group
Spotify Technology SA
Qi An Xin Technology
Ping Identity Holding Corp
CrowdStrike Holdings Inc
Tenable Holdings Inc
Baosheng Media Group
Universal Music Group
Bird (Bird Rides)
Electric Last Mile
Chinese Companies will struggle to list on US Stock Markets
The ongoing geopolitical stand-off between the US and China will discourage Chinese companies from listing on the US stock exchanges while those with existing listings in the US will look eastwards, says GlobalData, a leading data and analytics company.
GlobalData’s latest report, ‘Tech, Media and Telecom IPO Themes – Thematic Research’, reveals that 25 Chinese tech, media, and telecom (TMT) companies completed IPOs on the US stock exchanges in 2020. However, geopolitical developments mean there are increasing concerns about the future of some large Chinese company listings in the US. These challenges will force Chinese TMT companies to stay away from US exchanges in 2021.
In May 2020, the US Senate passed the Kennedy-Van Hollen Bill, which could delist companies if they cannot prove they are not influenced by governments. In December 2020, President Donald Trump signed the ‘Holding Foreign Companies Accountable Act’, which will require companies to prove that they are not owned or controlled by a foreign government and allow the US Public Accounting Oversight Board to review their financial audits.
On 6 January 2021, the New York Stock Exchange announced plans to delist several Chinese major telecom firms, including China Mobile, China Telecom and China Unicom. This followed a previous order from President Trump that banned companies and individuals from investing in firms that allegedly aid the Chinese military.
Swati Verma, Associate Project Manager for Thematic Research at GlobalData, comments: “These policies create problems for China and Hong Kong-based companies that are currently trading only on the US stock markets. As a result, these companies are now seeking listings elsewhere. Alibaba’s secondary listing in Hong Kong in November 2019 was a case in point. Subsequently, JD.com and NetEase had also completed their secondary listings in Hong Kong in June 2020.”
Ms Verma concludes: “GlobalData expects more Chinese companies to move towards their domestic market in 2021. Those in the pipeline include the Hong Kong listings of Bilibili and Pinduoduo. The outlook seems to be bleak for Chinese companies looking to list in the US market. However, with a new President in place, we will have to wait to see the impact on the US-China relationship and whether this changes recent policy announcements towards Chinese companies.”