Pre-IPO companies facing tough slog

A statement from the securities regulatory body revealed that, at present, more than 500 companies are waiting for approvals to get listed on the mainland capital market, but analysts said Thursday only some 300 of them have the chance to finish their IPOs within the year.

A total of 295 companies have applied to list on the Shanghai Stock Exchange or Shenzhen's Small and Medium Enterprise board (SME board), and another 220 firms are seeking public offerings on Shenzhen's ChiNext board, a statement from the China Securities Regulatory Commission (CSRC) showed late Wednesday.

China Postal Express & Logistics Co, which holds the express delivery brand EMS, and more than a dozen city commercial banks, are on the list of companies seeking a public offering.

And several Hong Kong-listed companies, such as China National Building Materials Co and R&F Properties, are also seeking mainland listings, the statement said.

"Considering the bad IPO performance in January, only half of the companies are expected to successfully get listed this year," Wang Jia, an analyst at ChinaVenture Investment Consulting Group, told the Global Times Thursday.

In January, only 10 companies got listed on the Shanghai and Shenzhen stock exchanges, raising some 6.36 billion yuan ($1.01 billion), a 61.8 percent drop month-on-month, according to statistics from consulting firm ChinaVenture.

"Given the uncertainties in the global capital market and higher threshold for domestic IPOs, it will be hard to see a big increase in IPO numbers this year, and funds raised will also remain at a low level in 2012," said Zhang Qi, an analyst with consulting firm Zero2IPO Group.

A total of 281 companies were listed on the mainland capital market in 2011, and Zhang said the number will remain at about 300 this year.

Many companies have delayed or cut the size of their IPOs with the reverse market conditions. China Communication Construction, the country's largest port builder, has slashed its Shanghai IPO by 75 percent to 5 billion yuan earlier this week.

Statistics from ChinaVenture showed the size of refinancing in the A-share market drastically declined in January. Eight companies had private placement in January, raising some 14 billion yuan, a 76.6 percent month-on-month drop.

CSRC also revealed the approval process of IPOs for the first time Wednesday, and said that it will update the list of companies that applied for IPOs each week.

"The move aims at a more transparent information disclosure system, which could guarantee a fairer playground for investors and can help to avoid the possibilities of corruption," Wang noted.

Zhang from Zero2IPO Group said the new move could greatly raise the quality of IPO.