Midea shares surged in HK after biggest IPO in 3 years

The firm rose to 60 Hong Kong dollars ($7.70) in early trade, up 9.5 percent from its peak listing price of 54.80 Hong Kong dollars ($7.03) the interval indicated in its prospectus.

Midea’s high-profile listing has fueled hopes that Hong Kong’s bourse can attract more top Chinese firms and regain its crown as the world’s top venue for IPOs.

The Chinese financial hub has seen a steady decline in new deals since a regulatory crackdown by Beijing that began in 2020 prompted some Chinese mega-companies to put their plans on hold.

The city saw just 30 IPOs in the first half of this year, compared to more than 100 annually between 2013 and 2020.

Midea’s IPO eclipsed the combined valuation of all new Hong Kong listings so far this year and is the city’s biggest since JD Logistics and Kuaishou Technology 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 statement to the Hong Kong Stock Exchange on Monday, it said the international portion of the IPO was oversubscribed eight times before considering adjusting the offer size.

Midea Chairman Paul Fang called the listing “a strategic step forward in the company’s globalization,” the South China Morning Post reported on Tuesday.

Cornerstone investors, including a subsidiary of Cosco Shipping Holdings and part of UBS Asset Management Singapore, agreed to buy $1.26 billion worth of Midea shares.

Founded in 1968, Midea has become one of the world’s largest sellers of home appliances such as washing machines and air conditioners and also owns German industrial robot manufacturer Kuka.

Last month it reported a 14 percent rise in net profit in the first half of 2024, despite falling consumer spending due to China’s economic slowdown, while revenue came in at $52.7 billion.

The Hong Kong company’s shares were offered at a 20 percent discount to its share price in Shenzhen, where it has been listed since 2013.

Hong Kong’s stock market received a boost earlier this year after Chinese regulators unveiled measures to support the city’s status as a financial hub.

The exchange operator will also change its policy this month to continue trading through typhoons and strong storms in a bid to increase competitiveness.