Shares of Midea Group rose 9.5% in Hong Kong after the $4 billion listing by Reuters

By Scott Murdoch and Donny Kwok

SYDNEY (Reuters) – Chinese appliance maker Midea Group rose as much as 9.5 percent in its Hong Kong trading debut on Tuesday after raising nearly $4 billion in the city’s largest share offering in nearly four years, bolstering hopes for a revival of the Chinese majors. broadcasts.

Midea, also listed in Shenzhen, priced its shares at $54.80 each in its Hong Kong float.

It rose to $60 a share, 9.5% above the offer price, with 34.6 million shares worth $2.04 billion. Midea is the most actively traded stock by turnover on the Hong Kong market so far on Tuesday, stock data showed.

Midea sold 565.9 million shares in the deal that bankers hope could revive weakened Hong Kong capital markets, where share sales have fallen to their lowest point in more than a decade.

The final price set was about a 20% discount to Midea’s Shenzhen-listed share price. Mainland Chinese stocks typically trade at a premium to Hong Kong-listed stocks.

Midea increased the number of shares on sale at the end of the deal after receiving strong demand from investors during the book building process.

The institutional tranche was 8 times oversubscribed and the Hong Kong retail offering side was covered 5.31 times, according to Midea’s regulatory filings.

Oversubscription rates, while higher than recent Hong Kong offerings, remain well below the city’s capital markets boom in 2021, when deals were covered hundreds of times.

Trade tensions between the US and China and high interest rates globally have dampened the appetite of foreign investors to buy larger deals in China’s equity capital markets, according to bankers and advisers.

Midea’s deal means there have been $6.5 billion worth of public offerings and initial listings in Hong Kong so far in 2024, according to Dealogic data, compared with $2.7 billion in the same period last year.

At the same time, in 2021, when Hong Kong markets were at a record high, there was $35.7 billion, the data showed.