A-share Market Signals Major Recovery with Over $90 Billion in Private Placements

Record-Breaking Fundraising in Private Placements

The A-share market has delivered a significant recovery signal through unprecedented fundraising activity in 2025. Current Wind data reveals that 66 listed companies completed private placements by mid-July, collectively raising over 650 billion yuan ($90.5 billion). This represents a remarkable 199% increase compared to the same period last year. The resurgence demonstrates renewed investor confidence following years of pandemic-related volatility and regulatory uncertainty.

Market Recovery Indicators

– Placement sizes averaging 9.8 billion yuan per transaction
– 91.55% of placements currently trading above offering price
– Banking sector dominates with 79.78% of total fundraising
– Private placements attracting long-term institutional investors seeking discounted entry

Policy Drivers Behind the Surge

The market resurgence follows pivotal regulatory reforms implemented this year. The 2025 rules significantly lowered financing barriers through three key provisions:

• Broadened strategic investor qualifications to include more institutional participants
• Increased pricing flexibility allowing issuers to choose optimal pricing dates
• Reduced issuance discount from 90% to 80% of benchmark price

These measures align with China’s broader economic stabilization strategy. “The revival demonstrates crucial repair of A-share’s financing function,” explains CICC’s capital market analyst. “Market-oriented reforms coupled with monetary easing created perfect conditions for quality enterprises to access capital.”

Economic Tailwinds

Q1 GDP growth exceeding projections triggered corporate expansion plans requiring financing. PBOC governor Pan Gongsheng (潘功胜) provided liquidity support through reserve requirement ratio (RRR) cuts. Confidence returned as manufacturing PMI consistently stayed above the expansion threshold of 50.

Accelerated Approvals

Wind statistics confirm processing timelines significantly shortened since February 2025. By July 6th regulators approved placements exceeding 2024’s full-year total. Caitong Fund projects continued supply growth throughout the year.

The Banking Sector’s Capital Push

State-owned financial giants drove fundraising activity through record placements:

Recapitalization Imperative

Banks face dual pressure from rising NPLs and narrowing interest margins according to Liu Youhua, research director at Paipaiwang Wealth. Core capital adequacy ratios prompted urgent action:

• Postal Savings Bank: 9.56% CET1 ratio
• Bank of Communications: 10.24% CET1 ratio
• CCB and BOC stronger at 14.48%/12.20%

“This capital infusion strengthens systemic resilience,” notes Changli Asset chairman Bao Xiaohui (宝晓辉). “Regulatory requirements now exceed Basel III standards impacting lending capacity.”

Emerging Investment Opportunities

Placement performance shows strong profitability with over 91% trading above issuance prices. Top performers include Zhonghang Chengfei (+187%) and Dongshan Precision (+132%). This contrasts sharply with 2022 when just 36% generated positive returns.

Profitable private placements clustered within:

• Defense manufacturing
• Industrial automation
• High-end electronics
• New energy vehicles

Investor Strategy

Changli Asset’s investment framework emphasizes:

• Fundamental analysis: Project viability management capability
  – Capital allocation logic: Specified usage vs general replenishment
  – Technical pricing: Discount analysis relative to intrinsic value
  – Duration sensitivity: Lock-up period implications

The resurgence succeeds where past placements struggled by attracting sophisticated institutions rather than speculative capital. Finance executives like China Construction Bank CFO Wang Jiang (王江) note improved investor quality.

Future Trajectory

The extraordinary momentum shows no immediate signs of slowing. Caitong Fund maintains “supply-driven demand” will continue through Q4 given regulatory pipeline depth.

This resurgence extends beyond transient financing into sustainable corporate development:

• Industrial automation leader RoboTec secured funds for photovoltaic manufacturing R&D
• O-Film Technology pursuing semiconductor acquisitions
• Major banks targeting small-and-medium enterprise loans

The private placement revival represents structural progress not speculative froth. China Securities Journal reports enterprise recipients allocating over 87% of raised capital directly toward productive assets.

Path Forward

The A-share market resurgence demonstrates capital reallocating precisely where China’s dual circulation strategy requires financing. While real estate risks remain contained, officials monitor sector exposures proactively.

Seizing Market Momentum

The record placements signal restored market functionality where reforms meet opportunity. Investor conferences highlight China’s discounted valuations relative to global counterparts despite higher absolute growth.

As capital seeks quality issuers with transparent governance and strategic vision, discerning participants should:

1. Monitor CSRC filing disclosures for upcoming offerings
2. Track strategic sectors aligned with industrial policy goals
3. Assess management track records on capital deployment
4. Balance short-term discounts against long-term prospects

This resurgence represents more than financing recovery – it marks restored faith in China’s capital markets as engines of sustainable value creation.