Market AnalysisSep 22, 20262 Min
Four Chinese Companies Seek To Raise $1.8 Billion Via IPOs In Hong Kong As Market Cools
Four Chinese firms are looking to raise up to a combined HK$14.35 billion ($1.8 billion) via separate initial public offerings (IPOs) in Hong Kong as the market experiences a slowdown, exchange filings showed on Monday.
Shares of all four firms are expected to list on September 29.
Automation equipment maker RoboTechnik accounts for the largest portion. The other IPOs are by precision motor solutions provider Direct Drive Tech, printed circuit board maker Shenzhen Kinwong Electronic, and materials producer Red Avenue New Material.
What The Companies Are Offering
RoboTechnik is offering 11.9 million H shares at up to HK$436 each. Investors require a minimum of HK$22,019.9 to buy a single lot of 50 shares, as per Reuters.
The company aims to raise HK$5.18 billion through its IPO. If both an over-allotment option and a 15% offer size adjustment option are fully exercised, the deal could reach HK$6.85 billion.
RoboTechnik’s offer price represents a 40% discount on the closing price of its Shenzhen-listed shares on Friday, as per the South China Morning Post.
The Suzhou-based company has attracted 16 cornerstone investors, including Chinese asset-management company E Fund Management and Singapore investment company Temasek. The cornerstone investors together committed to 35% of the offer.
RoboTechnik’s products include complete production lines, manufacturing equipment and smart manufacturing systems for the silicon photonics and photovoltaic industries.
Red Avenue New Materials plans to sell 68.1 million H shares at a maximum offer price of HK$44. The company plans to raise up to HK$3 billion through its public issue. Each lot of 100 shares requires a minimum investment of HK$4444.4.
Shenzhen Kinwong Electronic is offering over 72.9 million shares in its IPO to raise HK$5.10 billion. Priced at a maximum of HK$69.88 apiece, the shares represent a 42% discount from Friday’s closing price for the printed circuit board maker’s Shanghai-listed stock. There is an entry fee of HK$7058.5 per lot of 100 shares.
Shenzhen Kinwong Electronic attracted 14 cornerstone investors, including Kingboard Holdings subsidiary KHL and optical transceiver manufacturer Zhongji Innolight. Together, the two companies committed 47% of the total fundraising, or $310 million.
Lastly, Direct Drive Tech aims to raise HK$1.08 billion, with an offer price of HK$21.6 per equity. Investors must pay HK$2181.8 for one lot of 100 shares.
For the four IPOs, the first-day margin orders for the retail quotas were slow. Data from several brokerages revealed that as of 4 pm on Monday only Direct Drive Tech, the smallest of the offerings, was fully subscribed. The remaining three firms fell short of full subscription.
Hong Kong’s IPO Market This Month
Hong Kong’s stock exchange has shown signs of slowing down this month. Hong Kong listings raised about $43 billion in the first eight months, but only one out of six new listings in September gained ground.
Among September’s IPOs so far, only Excelland Robotics gained in its debut, rising 153% on September 9.
On the other hand, Transwarp Technology lost 9.18% after its debut this month. The other four listees - Mech-Mind Robotic, Shein, Longsys Electronics, and Medcaptain Medical Technology - fell between 18 and 45% since their debuts.
