Hong Kong is getting another thumbs-up as a centre for growth capital as more mainland companies seek stock exchange listings in the city despite lingering concerns about social unrest in the new year.
Activation Group Holdings, which organises events and exhibitions for luxury brands like Chanel, Louis Vuitton and Mercedes-Benz in mainland market, is aiming to raise HK$538.2 million from an initial public offering in January to help fund its expansion.
The Shanghai-based company, which also promotes actress Carina Lau Kar-ling’s fashion label, is among six corporations which unveiled their IPOs on Monday alone, suggesting companies are keeping a positive outlook on the market.
The company will offer 200 million shares to global investors at HK$1.71 to HK$2.34 apiece, subject to final pricing. Based on the top end of the range, plus a potential overallotment of 30 million shares, the offering could raise as much as HK$538.2 million (US$69 million).
It will take orders from investors from December 31 until through January 9, according to its listing timetable. The shares could start trading on January 16.
Activation Group plans to expand its business in the Greater Bay Area, a business hub comprising Hong Kong, Macau and nine other cities in the southern Guangdong province, Steve Lau Kam-yiu, co-chairman and chief executive said in an interview with the Post.
“About 93 per cent of our business is in mainland China, so the recent social events in Hong Kong have not had too much of an impact on us,” he said. It also plans to establish an office in Paris “to expand our client base in the European market.”
The group employs more than 400 staff and made its name by being the go-to entity for companies seeking to promote their brands to 1.4 billion consumers in China. Last year, Activation ranked as number one with a 6.3 per cent market share in so-called “experiential” marketing services for luxury brands in Greater China, according to China Insights Industry Consultancy.
Carina Lau, who won the best actress award at the 2011 Hong Kong Film Awards for her roles in Detective Dee and the Mystery of the Phantom Flame movies, considers the Activation Group as “very reliable and experienced.”
Apart from Activation Group, five other companies have disclosed their Hong Kong IPO plans on Monday, seeking to raise at least HK$3 billion of proceeds.
They are fashion retailer Forward Fashion, paper manufacturer QP Group, developer Huijing Holdings, online tour-guide company Lvji Technology and waste management firm Beijing Enterprises Urban Resources.
Hong Kong ranked as the world’s largest initial public offering market in 2019, where 144 companies have raised US$40 billion through December 26, according to data compiled by Refinitiv. That is the highest amount since 2010.
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