The year was blighted by the Covid-19 pandemic, but that did not stop companies from tapping the Hong Kong stock market to raise funds. A bottled water maker, a detergent giant and new economy behemoths were among the 142 companies that pushed Hong Kong’s IPO fundraising to a 10-year high in 2020 at US$50.83 billion, according to Refinitiv data.
Chinese companies occupied the top 10 blockbuster IPOs in Hong Kong, with five of them ranking in the global top 10.
The Post looks at some of the highlights.
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Which company raised the most money?
Mainland e-commerce giant JD.com’s US$4.46 billion secondary listing in June was the year’s largest fundraising by a company including IPOs, according to Refinitiv data. A year earlier that honour went to Alibaba Group Holding when the e-commerce giant and owner of this newspaper raised US$12.9 billion from its secondary listing. Overall, there were 12 secondary listings last year, which accounted for 37 per cent of funds raised in Hong Kong.
Mainland tech giants that had previously skipped Hong Kong to list in the US for better valuation have been returning to raise funds after the city’s stock exchange introduced a slew of listing reforms in April 2018 that made it easier for companies with weighted voting rights to list here. Accelerating this trend is US legislation targeted at limiting Chinese firms’ access to US capital markets.
Which was the most popular IPO?
Chinese bottled water giant Nongfu Spring went into the record books as Hong Kong’s hottest IPO ever. Nongfu’s retail shares were overbought 1,147 times, locking up HK$677 billion (US$87.35 billion) in the capital or one-third of money in circulation in the city.
It broke the record set by China Railway Construction Corporation in 2008 when its HK$20.2 billion IPO received HK$541 billion in bids.
Nongfu’s share price soared 85 per cent to HK$39.80 on debut from its IPO price of HK$21.5. It closed at HK$54.9 on Thursday, more than double its IPO price. The strong performance boosted the fortunes of 66-year-old Zhong Shanshan who overtook Alibaba co-founder Jack Ma to become the richest man in China and Asia, and No 8 worldwide, according to Forbes. The low-profile Hangzhou-based founder of Nongfu had a net worth of US$78.6 billion at the end of 2020, up from US$2 billion at the start of the year.
Which was the best-performing first day listing?
It was OcuMension Therapeutics. The ophthalmic therapy provider made intraday gains of as much as 193 per cent on its debut on July 13 before finishing the day 152.4 per cent higher at HK$37. On the last of trading in 2020, the shares closed at HK$27, up 84 per cent from its IPO price.
Which company would have provided the best returns had investors held it until the year-end?
E-cigarette maker Smoore International Holdings rose 150 per cent on debut on July 10. Its share price has continued to rise since, standing at HK$59.85 on the last trading day of 2020, providing returns of 382 per cent from its IPO price.
Which were the biggest IPOs from the Greater Bay Area?
Guangzhou-based laundry detergent maker Blue Moon Group Holdings and Shenzhen-based China Evergrande Property Services launched the biggest IPOs from the bay area in 2020, underlining the city’s role as a fundraising hub.
Evergrande Property Services, a unit of mainland China’s largest and most indebted developer China Evergrande Group, raised US$1.79 billion in November, allowing its parent to pare back its massive debt.
Blue Moon meanwhile raised US$1.27 billion. The shares, which have risen 16 per cent since debut, have turned chairwoman Pan Dong, 55, into one of China’s richest women. Pan’s 77 per cent stake in Blue Moon is valued at US$8.8 billion, according to the Bloomberg Billionaires Index. The former chemistry professor received a master’s degree in organic chemistry from Wuhan University in 1987 and worked as a teacher before joining Blue Moon in 1994.
What was the biggest disappointment last year?
Ant Group’s US$39.67 billion IPO was supposed to the world’s biggest offering ever. But the dual IPO on the Shanghai and Hong Kong stock markets was suspended less than 48 hours before trading was due to start on November 5 because of significant regulatory changes.
Some 1.55 million small investors in Hong Kong had pumped HK$1.3 trillion into the Ant IPO in late October in a bid to get a slice of the shares. The suspension also triggered the ever largest IPO refund in the city on record.
The loss of Ant’s jumbo offering pushed Hong Kong to second place in the global IPO fundraising ranking after Nasdaq. In 2019 Hong Kong was the world’s largest IPO market, a title it has achieved seven times in the past 11 years, according to data of Refinitiv.
Which was the world’s largest IPO?
Chinese chip maker Semiconductor Manufacturing International Corporation’s US$7.53 billion IPO on Shanghai’s Star Market in July was the world’s largest IPO last year, according to Refinitiv data. It was the biggest since July 2010 when the Agricultural Bank of China netted 68.7 billion yuan (US$10.5 billion) on the mainland stock market.
The company’s shares opened at 95 yuan on July 16, tripling from its IPO price of 27.46 yuan. The shares closed the year at 57.75 yuan, up 110 per cent.
In a surprise move in 2019, SMIC said it would delist from the US market amid heightened tensions arising from the US-China trade war that saw President Donald Trump order US technology companies to stop supplying their hardware, software and services to Chinese companies on national security grounds.
The company first listed in Hong Kong and US in 2004. The 16-year gap between its Hong Kong and Shanghai listings is the widest among all firms listed in both Hong Kong and Shanghai.
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This article Nongfu Spring, Blue Moon and Smoore – popular IPOs that provided outsized gains to investors in 2020 first appeared on South China Morning Post