Three of four Hong Kong IPO debuts open below offer prices
Hong Kong’s latest batch of listings produced mixed results, with three of four new stocks opening below their offer prices after the companies raised a combined HK$14.4 billion. The performance adds pressure to a sluggish IPO market despite several major listings during the third quarter.
Three of four companies that began trading in Hong Kong on Tuesday opened below their offer prices, testing hopes of a revival in the city’s initial public offering market. The four companies raised a combined HK$14.4 billion, or about US$1.83 billion. RoboTechnik Intelligent Technology, the largest of the group, raised HK$5.18 billion but traded nearly 10 per cent below its offer price in morning trading.
Shenzhen Kinwong Electronic priced its shares at the top of the marketed range at HK$69.88 and fell as much as 8.1 per cent after raising HK$5.1 billion. It later recovered and traded nearly 11 per cent above its offer price. Shanghai-listed materials manufacturer Red Avenue New Materials opened 9 per cent lower, while electric-motor supplier Direct Drive Tech opened 4 per cent higher.
The mixed debuts follow a difficult third quarter for Hong Kong listings. By September 22, 26 companies had listed during the quarter. Twelve fell below their offer prices on the first trading day, while 12 traded more than 20 per cent below those prices.
A fifth company, Shenzhen Camsense Technologies, is due to begin trading on Wednesday after raising HK$680 million. Its public offering attracted 158,000 applications and was reported to be 3,551 times oversubscribed. Together, the five companies represent Hong Kong’s busiest listing week since July, when 15 companies began trading in one week.
The early performance remains uneven, with strong demand not always translating into gains after listing.
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