Wednesday, October 16, 2019
 
Columnist
Martin Hennecke

Flying start for mainland debutants
 
11/10/2019
 
<p>Shares of two mainland companies surged on their debut yesterday, with 360 Ludashi (3601) becoming the best-performing IPO so far this year.</p><p>360 Ludashi, the developer of well-known utility software brand Ludashi, jumped 2.19 times to HK$8.6 on its first trading day with a market turnover of HK$1.17 billion.</p><p>The Chengdu-based firm, controlled by Shanghai-listed 360 Security Technology, raised HK$105.7 million and its retail tranche was oversubscribed by 276.36 times.</p><p>Also, shares of Topsports International (6110), the sportswear arm of Belle International, rose 8.8 percent to HK$9.25 on its first trading day with first-day turnover reaching HK$2.53 billion.</p><p>Belle International, the biggest women&#39;s shoe retailer in China, was a blue-chip stock traded on the mainboard until 2017, when private equity firms Hillhouse Capital and CDH Investments took the company private in a US$6.8 billion deal.</p><p>CDH Investments, which also is a shareholder of Topsports, said yesterday that Belle&#39;s other business arms might go public in two to three years, but IPO destinations remained uncertain.</p><p>Meanwhile, two firms saw shares climb in the gray market before their public trading.</p><p>Shares of Xinyuan Property Management Service (1895) grew 12.98 percent to HK$2.35 in the Bright Smart gray market last night.</p><p>The Henan-based property management company raised HK$220.3 billion after pricing its public float at HK$2.08, the bottom of the indicative price range.</p><p>Optima Automobile (8418), which started trading on the Growth Enterprise Market today, saw a 6.25 percent increase in share price to HK$0.26 in the gray market last night.</p><p>In other news, state-owned financial conglomerate China Everbright Group aims to restructure its sprawling business and pursue a billion-dollar initial public offering in Hong Kong next year.</p><p>Everbright&#39;s IPO will likely be in the billion-dollar bracket, while the offering size has yet to be finalized. A source estimated that Everbright, backed by sovereign wealth fund subsidiary Central Huijin Investment and China&#39;s Ministry of Finance, could raise up to US$3 billion (HK$23.4 billion). The Fortune 500 company has recently hired US investment bank JPMorgan and Chinese peers China International Capital Corporation (3908) and CITIC Securities as restructuring advisers.</p><p>Beijing-based Everbright has been exploring IPO plans since the first half of the year and has been asking state-owned conglomerate CITIC Group for advice.</p>

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