Tencent-backed start-up on fire in gray

Investor enthusiasm for new listings in Hong Kong remains huge in the new year, with a loss-making medical software company attracting record-breaking orders and seeing its shares skyrocket as much as 166 percent in the gray market.

Five mainland companies start trading on the mainboard today. Among them, Yidu Tech (2158), a software company providing healthcare solution services, attracted more than 1.17 million valid applications, the highest number after Ant Group's suspended IPO, which attracted 1.5 million orders.

Yidu's shares closed more than 120 percent higher than its offering price in the gray markets last night, meaning investors could make a paper gain of more than HK$3,100.

The Tencent (0700)-backed company raised HK$3.9 billion after pricing its initial public offering at HK$26.3 apiece, the top end of the indicative price range. Its retail portion was oversubscribed by more than 1,632 times and the institutional tranche was covered by 34 times.

Yidu offers healthcare solutions built on big data and artificial intelligence technologies to hospitals, medical firms, research institutions, and the government. Its net loss narrowed 24.13 percent to 505.81 million yuan for the quarter ended June.

The deal attracted eight cornerstone investors, including Tencent, Kerry Holdings, Canada Pension Plan Investment Board, and OrbiMed.

Dickie Wong Tak-kei, executive director of research at Kingston Securities, expects the stock may double in price today and suggested investors should cash out.

Among other new debutants, mainland TV drama producer Strawbear Entertainment Group (2125), backed by video-streaming firm iQiyi, saw its share price rise more than 30 percent in the gray markets while Cheshi Holdings (1490), a mainland online automobile new media platform, jumped around 40 percent.

Meanwhile, Roiserv Lifestyle Services (2146), the property management arm of Risesun Real Estate Development, and Modern Chinese Medicine Group (1643), proprietary Chinese medicine maker, both slid around 2 percent in some gray markets.

In other IPO news, Chinese online short video start-up Kuaishou passed a listing hearing with the Hong Kong stock exchange yesterday, mainland media reported. The Tencent-backed firm is seeking to raise up to HK$39 billion from a public sale before Lunar New Year.