China’s securities association has drafted rules to set up a firewall between investment bankers and analysts in deals to ensure unbiased pricing of initial public offerings (IPOs), Shanghai Securities News reported yesterday.
Bankers in an IPO deal are barred from discussing profit forecasts and valuations with analysts, who should make conclusions independently, the newspaper said, citing rules drafted by the Securities Association of China.
Brokerages should also regularly check their internal firewall systems, according to the rules, which were distributed to brokerages for their opinions, the newspaper said.
Such rules would prevent distortion of IPO pricing, protect investor interest in a market crucial to funding innovation and growth in the world’s second-biggest economy, it said.
China has adopted a US-style, registration-based IPO system in some parts of its stock market to make pricing of shares more market-oriented, with plans to soon expand the reform to the entire market.
A company’s valuation report is increasingly important under such an IPO system, but analysts have inadequate levels of independence in writing such reports, some of which are grossly inaccurate in their projections, the newspaper said, citing China’s securities association.
To avoid conflict of interest, investment bankers would be barred by the rules from discussing earnings estimates and valuations with analysts in an IPO deal, though they can communicate on the basics of the issuer in the presence of compliance officers, the newspaper said.
The rules also ban issuers, investment bankers and salespeople from exerting pressure on analysts to skew their research conclusions, it said.
Separately, Calb Co (中創新航), a Chinese battery supplier for electric vehicle makers, is planning to seek Hong Kong Stock Exchange approval for its IPO in the territory as soon as this week, people familiar with the matter said.
The Jiangsu, China-based company could be scheduled for a listing hearing tomorrow, said the people, who asked not to be identified as the information is private.
Calb could raise as much as US$2 billion in the IPO if it fully exercises its overallotment option, the people said.
Deliberations are ongoing and Calb’s listing hearing could still be delayed with IPO details subject to changes, the people said.
An external representative for Calb did not immediately respond to requests for comment.
Established in 2007, Calb makes lithium batteries for electric vehicles and other products. It operates major production bases in China, including in Changzhou, Xiamen and Wuhan, according to its Web site.
Calb filed for a Hong Kong IPO in March with Huatai International Ltd (華泰國際) as the sole sponsor of the deal.
At US$2 billion, Calb’s IPO could be the second-biggest in Hong Kong this year, behind China Tourism Group Duty Free Corp’s (中國旅遊集團中免) US$2.1 billion listing, data compiled by Bloomberg showed.
China Tourism Group Duty Free suspended a potential US$5 billion Hong Kong listing in December last year, joining a slew of companies that chose not to proceed with deals amid a choppy market.
The seller of tax-exempt goods such as tobacco, wine and perfumes to travelers considered reviving the listing plan to seek as much as US$3 billion, Bloomberg News reported in June.
The duty free company managed to sell the Hong Kong shares as the island of Hainan, a major tourist destination in China and the source of most of the company’s sales, experienced one of the nation’s worst COVID-19 outbreaks since Shanghai’s lockdown earlier this year.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”