Weak sentiment dents Tam Jai before debut

Finance | Victor Zhong and Bloomberg 7 Oct 2021

Tam Jai International (2217) closed 6 percent lower than the offer price in the gray market but that did not affect the plan of iQiyi, another listing candidate, to raise US$500 million (HK$3.9 billion) in a secondary listing in Hong Kong.

Shares of the rice noodle chain dived below the IPO price by as much as 6.3 percent to HK$3.12 in the gray market before the debut, given weak market sentiment, data of local brokers showed.

This suggests a maximum paper loss of HK$210 per board lot, equivalent to the cost of five bowls of rice noodles.

The chain operator raised net proceeds of HK$1.04 billion in the share sale.

Meanwhile, US-traded Chinese streaming video site iQiyi has picked banks for its Hong Kong second listing, Bloomberg reported, citing people familiar with the matter.

The Netflix-style service is working with advisers including Bank of America, CLSA and Goldman Sachs Group on the share sale, the people said, asking not to be identified as the matter is private.

The listing could take place as soon as the end of this year, they said.

iQiyi, a subsidiary of internet search giant Baidu, could raise at least US$500 million (HK$3.9 billion) in the share sale, the people said.

Deliberations are ongoing and the company could decide to delay or scrap its listing plan, the people said.

Representatives for Bank of America, CLSA and Goldman Sachs declined to comment. Representatives for Baidu and iQiyi couldn't immediately respond to requests for comment made during a holiday in China.

The potential listing comes as Chinese firms with listings on US exchanges have suffered sharp declines from an ongoing crackdown by regulators, wiping billions of dollars off the market value of technology firms in particular.

iQiyi was ordered in May by the Beijing Municipal Radio and Television Bureau to suspend taping of a hit youth-oriented show for unspecified problems, a WeChat statement said.

iQiyi's library includes its own original movies and TV shows as well as licensed and user-generated content. The company raised about US$2.4 billion in a New York initial public offering in 2018. The service led rivals Tencent (0700) and Youku, owned by Alibaba (9988), with 579.1 million monthly active users in June, said data compiled by Bloomberg Intelligence.

In other news, China's MicroTech Medical (Hangzhou) started book building yesterday, with a minimum investment of HK3,146 per board lot.

The medical device maker focusing on diabetes management had attracted at least HK$376 million yesterday, marking a one-time oversubscription.

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