Hong Kong Stocks IPO Market Recovery Investors Successively Admission

Contributing author Julia Hongkong Report

In October 29th, Hongkong IPO market ushered in the mainland infant formula milk powder leading enterprise, China Fei He dairy industry (hereinafter referred to as Fei He). This is the reopening of IPO in 2013 after flying crane privatized in NYSE.

According to the sales documents, Fetion plans to sell 893 million 300 thousand shares, accounting for 10% of its enlarged share capital. The stock price per share ranged from HK $7.5 to HK $10, and the fund-raising amounted to HK $8 billion 933 million, the fourth largest share in Hong Kong stock market during the year. The proceeds from fund-raising will be used to repay offshore debts, capture potential acquisitions opportunities, and plant operating capital, R & D and working capital.

Feihe will be subscribed in November 5th, and will be listed on November 13th. The joint sponsor is Morgan chase, China Merchants Securities and CITIC International.

Prior to that, in May 2017, flying crane submitted relevant materials to HKEx to try to re-enter the capital market. But in December of the same year, flying crane spent $28 million to buy Vitamin World, the third largest nutrition and health supplement company in the United States, and announced the suspension of IPO in Hong Kong.

Song Wenhui diagram

The ceiling price is only 16 times.

Liu Hua, chief financial officer of Feida crane, admitted at a press conference in October 29th: "the IPO price is not too high, and the price range is obviously cheaper than that of the same industry. We hope to introduce the international high-quality long term fund to share the dividends of the company's growth."

It is reported that the price range of Feida IPO is only 12.2 times to 16 times, which is not only 18.1 times to 22.6 times the previous estimate of the underwriting group, but also far lower than other industries in the industry with a price earnings ratio of more than 20 times. According to our reporter, more than 100 people attended the investor promotion conference held in October 28th. A number of fund managers said that the company's business grew rapidly, and some of the new Hong Kong stocks were hot recently.

Flying crane management revealed that there was no introduction of any cornerstone investor in this prospectus. This is a decision made after discussions with the sponsors, but the international placement portion for institutional investors has been fully subscribed. "In view of the growth potential of the company as the head of the industry, the market share of the top three infant formula brands in Europe and the United States exceeds 90%, and China's future market integration is bound to be inevitable. Further speed up. "

As the largest local infant formula brand in the mainland, Feida has a 15.6% share in the mainland market and a 25% share in the high-end market. At the same time, from the perspective of the composition of the company's revenue, the high-end infant formula is the main contribution. The proportion of sales of high-end infant formula milk products is also increasing year by year. Up to the end of June this year, the proportion has reached 66.5%.

The company's partners, Lu Hua Ji, admitted to our reporter: "most of the listed companies are more restrained in pricing, and hope to provide investors with some room for improvement as far as possible after listing, so the overall market reaction is better."

"Because of the backlog of companies, the market has also accumulated some investment needs," he said. We see that listed companies are more conservative in pricing, and investors still have certain demand for new shares that are priced reasonably. We expect this situation to last until the end of this year.

In fact, in the first three quarters of this year, as the performance of the Hong Kong stock market was not good enough, the overall pricing level of the IPO issue had been lowered. According to DDT's statistics, 21% of new stock prices in the first three quarters of this year were higher than the median selling price range, down 21 percentage points from the same period last year. During the period, the share price of new shares listed at 20 times -30 times price earnings ratio accounted for about 11%, but 5 percentage points lower than that of 16% in the same period last year. The share of new shares listed on more than 40 times price earnings ratio fell further from 15% last year to 8% this year, down to 7 percentage points.

Judging from the first day of performance, the average return of all new shares in the first three quarters of this year is around 10%, down sharply from 17% in the same period last year.

IPO market heating up

Hongkong's IPO market is revived after its brief trough in August and September. According to Lu Hua Ji, there are still about 180 companies waiting for listing at the HKEx. According to our correspondent's data, there are 20 IPO in the HKEx since October, compared with 1 in October and 6 in August.

"From the circulation point of view, the IPO market of Hong Kong stock market has obviously increased. Part of the reason is that the market is too quiet in the first two months, and a large number of shares that have been listed in October have performed very well and have fired up the market heat. "A new equity fund manager told the reporter." and at the end of the year, the companies that plan to go public this year are stepping up the pace. Now that the market is hot and the attention is good, catch up with the fast ride. "

However, the fund manager said frankly: "almost every new share has doubled. It has not been seen for many years, and it will not be normal. Among them, some small brokerages hype market atmosphere is also related. The new shares should be normal, but the whole will be warmer than the first half. "

In fact, the recent performance of many new listings is very bright. 06855.HK, a biotechnology company, opened in October 27th, opening HK $53, rising to HK $53.6 in intraday trading, rising 56.7% compared to HK $34.2. According to our reporter's data, about 14 of the 20 new shares listed in October were on the first day of the listing, and the shares rose by 218.5%, 93.8% and 78.1% respectively, including 03610.HK, 08418.HK and 08418.HK.

The alarming increase in the first day of listing also attracted a large influx of retail investors. It is reported that the mainland IP game publishers in the hand travel (00302.HK) public offering oversubscribed up to 537 times, frozen funds more than 71 billion 600 million Hong Kong dollars.

It also made some companies that had postponed the listing plan "ready to move". For example, Warburg Pincus, the largest logistics and real estate platform in the Asia Pacific region, is the largest shareholder in the US private equity fund. ESR (01821) will return to the market in November 1st and raise the amount of stock raising to 1 billion 450 million US dollars in June. It hopes to become the second largest new stock this year in November 1st.

According to the company's stakeholders told reporters that in June after the listing, many investors still expressed strong interest, hope that the company will be listed as soon as possible, the stock market responded enthusiastically, and finally decided in the prospectus price range.

However, Xu Yibin, chief executive officer of Hongkong Yao Cai securities, pointed out that as the Hong Kong stock market is generally in the market, the total daily trading is only HK $10 billion, and it is worried that the hot IPO market will soon come to an end. In October 29th, the Hang Seng Index closed at 26786 points, down 104 points or 0.4%, and the turnover of the big city was HK $78 billion 813 million.

In addition, there are also recently listed shares, the first day of listing appeared more than 30% decline, and many stocks on the first day after a good rise, but quickly turned green, so far, about 10 stocks declined compared with the stock price, the highest decline of 50%.

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