Broker's system crashes amid Kuaishou frenzy

Kuaishou Technology, China's No 2 short-video platform, saw its share price jump as much as 2.66 times to HK$421 in gray markets ahead of today's debut, indicating a good start to one of the world's biggest internet initial public offerings in two years.

Trading on Phillip Securities' platform was closed one hour and 15 minutes earlier, as massive retail orders overloaded its computer systems.

Backed by internet giant Tencent, Kuaishou's shares were trading 170 percent higher on the platform before the trading halt.

The startup's shares surged 1.9 times in Bright Smart Securities' gray market. And in Futu Securities' platform, the shares rose as high as 266 percent, before ending at a 190 percent premium.

Kuaishou, the biggest domestic rival of TikTok, raised HK$41.28 billion after pricing its IPO at HK$115, the top end of the indicative price range.

The retail portion was oversubscribed 1,203 times, making it the most popular IPO over US$1 billion (HK$7.8 billion) in the city in history, data compiled by Bloomberg showed. The deal attracted 1.42 million applications from retail investors, the highest ever, with HK$1.26 trillion in funds being frozen before listing. But only 4 percent of them were allotted the shares.

Kuaishou sold a mere 6 percent of its offering to retail investors, while the rest were for institutions. Some trades were executed for HK$250 apiece in gray market trading by institutional investors earlier this week, more than double the listing price, Bloomberg reported earlier.

That's also a bigger premium than the 50 percent jump on Ant Group's planned offering before it was scrapped.

The institutional tranche of the IPO was more than 38 times covered.

Futures and options of Kuaishou will be introduced on the first trading day, Hong Kong Exchanges and Clearing said earlier.

The offering of Kuaishou has attracted 10 cornerstone investors, which agreed to subscribe for US$2.45 billion in stock and will hold stock for six months in exchange for early, guaranteed allocation. The lineup includes the Capital Group, Temasek, GIC, BlackRock and Abu Dhabi Investment Authority.

Kuaishou's revenues rose to 52.5 billion yuan (HK$62.99 billion) for the first 11 months of last year. But the company has yet to turn a profit. Its net loss widened to 97.37 billion yuan for the first nine months last year from 1.62 billion yuan a year ago, as it poured nearly 20 billion yuan into sales and marketing.

The Beijing-based start-up said it intends to use the net proceeds from the IPO to improve content offerings and user experience, sharpen up marketing and promotional activities, expand services and strengthen research and development, as well as for potential acquisitions and investment.

Meanwhile, Chinese cancer screening firm New Horizon Health starts its Hong Kong IPO today, aiming to raise up to HK$2.04 billion. It is offering 76.6 million shares at HK$22.7 to HK$26.66 apiece, with a minimum investment of HK$13,464.33 a board lot of 500 shares.

MicroPort Cardioflow Medtech, a spinoff of Microport Scientific, surged 54.3 percent to HK$18.82 on its debut yesterday.

avery.chen@singtaonewscorp.com