Shares in Chinese electronic appliance maker Midea Group Co (美的集團) yesterday closed nearly eight percent higher on its Hong Kong debut, having raised about US$4 billion in the territory’s biggest initial public offering (IPO) in more than three years.
The firm closed at HK$59.1 following early exchanges where it spiked to HK$60.0, up from its HK$54.8 list price, which was at the top of the range indicated in its prospectus.
Midea’s bumper listing fueled hopes that the Hong Kong stock exchange can attract more top Chinese firms and regain its crown as the world’s top venue for IPOs.
Photo: Bloomberg
The Chinese finance hub has suffered a steady decline in new offerings since a regulatory crackdown by Beijing starting in 2020 led some Chinese mega-companies to put their plans on hold.
The territory had just 30 IPOs in the first half of this year, compared with more than 100 annually between 2013 and 2020.
“If this manages to hold on to gains for the week, it would definitely create a better IPO environment, paving the way for more to come,” Rockpool Capital Ltd (摩石資本) chief investment officer Benjamin Wong (黃務騰) told Bloomberg News.
Midea’s IPO has eclipsed the combined valuation of all of Hong Kong’s new listings so far this year, and is the territory’s largest since JD Logistics Inc (京東物流) and Kuaishou Technology (快手) in the first half of 2021.
The Foshan-based company last week expanded the number of shares on offer by about 15 percent to 566 million — an indicator of strong demand.
In a filing to the Hong Kong Stock Exchange on Monday, it said the international portion of the IPO was subscribed by more than eight times, before taking into account the adjustment to the offer size.
Midea chairman Paul Fang (方洪波) called the listing “a strategic step forward in the company’s globalization,” the South China Morning Post reported yesterday.
Cornerstone investors, including a subsidiary of Cosco Shipping Holdings Ltd (中遠海運控股) and part of UBS Asset Management Singapore Ltd, agreed to buy Midea stocks worth US$1.26 billion.
Founded in 1968, Midea has become one of the world’s largest sellers of home appliances such as washing machines and air conditioners and it also owns the German industrial robot maker Kuka AG.
Last month it reported a 14 percent rise in net profit in the first half of this year despite weakening consumer spending due to China’s economic slowdown, while revenue hit US$52.7 billion.
The company’s shares in Hong Kong were offered at a 20 percent discount compared to its stock price in Shenzhen, China, where it has been listed since 2013.
Hong Kong’s stock exchange received a boost earlier this year after Chinese regulators unveiled measures to support the territory’s status as a finance hub.
The exchange’s operator would also change its policy this month to keep trading through typhoons and heavy storms, in a bid to raise competitiveness.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the