New economy IPOs raised $480b after listing reform

Business | Avery Chen and Bloomberg 19 Nov 2020

New economy companies raised a combined HK$480 billion in Hong Kong after the exchange's listing reform in 2018, said Ba Shusong, managing director and chief China economist of Hong Kong Exchanges and Clearing (0388).

During the period, 150 new economy companies have gone public, including unprofitable biotech firms and companies already listed in other markets, Ba said in an online forum yesterday.

Hong Kong has already become the second-largest biotech initial public offering market in the world and the largest in Asia after HKEX broadened its listing regime in April 2018, which allows biotech companies without profit or revenue to list in the city.

Meanwhile, the intensified Sino-US trade relationship also accelerated the trend of "homecoming" listing of US-listed Chinese companies.

The US Securities and Exchange Commission is pushing ahead with a plan that threatens to kick Chinese companies off US stock exchanges, setting up a late clash between Washington and Beijing as the Trump administration winds down.

The IPO pipeline of the Hong Kong stock exchange remains strong despite China's surprise suspension of Ant Group's mega IPO. At least five mainland companies are preparing to launch IPOs next week to raise US$9 billion (HK$70.2 billion), and more mainland developers are seeking to spin off property management business in the city.

Evergrande Property Services, the property management arm of China Evergrande (3333), is set to kick off a US$3 billion IPO as soon as next week.

Blue Moon Group, China's largest liquid detergent maker, is scheduled to launch US$1 billion public sales on November 27 and go public on December 10, mainland media reported.

JD Health International, online health-care platform of JD.com (9618), plans to open retail books on November 25 to raise about US$4 billion and it is expected to start trading on December 7 or 8.

China Resources Mixc Lifestyle Services, a property manager backed by China Resources Land (1109), is planning to launch an IPO next week to raise US$1 billion. And Sino-Ocean Service, the property management arm of Sino-Ocean Group (3377), is seeking listing approval for its Hong Kong IPO that could raise US$300 million.

But Sunac Services (1516), Sunac China's (1918) property management arm, slid 0.5 percent in the gray market ahead of its debut. The company priced its IPO at HK$11.6 apiece, the mid-point of the indicative price range, after its retail tranche was oversubscribed 9.4 times.

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