Health care on top of China's IPO world

The average valuation of new shares in the health care sector in the A-share market hit a high of 36.6, with the greatest number in the information technology and industrial sectors, according to a report by the financial data and analytics platform ChinaScope that was released on Monday.

The report was based on data from the IPO-restart from Jan 17 to Feb 5.

The report said new shares in the IT sector ranked second by average valuation at 32. Raw material was lowest at 15.6.

The number of new shares in IT and industrial sectors accounted for 63 percent of all sectors.

By Feb 5, 43 companies had gone public, generating financing funds of 18.8 billion yuan ($3.06 billion). Their average price-to-earnings ratio was 28.82.

According to a rule of the China Securities Regulatory Commission released on Feb 12, if the PE ratio of a new share is higher than the industry average, its issuer and lead underwriter must release announcements on investment risk three weeks ahead of subscriptions.

The report said it is a positive move to help investors avoid unacceptably high risks, but it may also cause losses to issuers if the published industry-average PE ratio is not accurate.