Bottom line: Lufax’s Hong Kong IPO could launch by the end of this year and will get a strong reception, while Xinhuanet’s Shanghai IPO will get a similarly positive reception due to strong support from state-run investors.
Xinhuanet approved for Shanghai IPO
Just days after the stodgy Postal Savings Bank of China launched an IPO that will be the world’s biggest in 2 years, the much higher-tech P2P lender Lufax has kicked off another Hong Kong listing that’s nearly as large. More specifically, Shanghai-based Lufax has begun hiring investment banks for a listing that could raise up to $5 billion, according to new reports.
Meantime, a flurry of new domestic Chinese IPO plans is also in the headlines, led by word that state-owned online news giant Xinhuanet has been approved for a new listing in Shanghai. China stock watchers might recall that Xinhuanet’s IPO plan first surfaced in the headlines 3 years ago, but was indefinitely shelved due to repeated slowdowns and freezes for new domestic offerings due to market volatility. Read Full Post…
Bottom line: IPOs by China Lending, China Film and Babytree should all do relatively well, and their diverse listing destinations reflect the growing choices available to Chinese companies for public offerings.
Babytree raises 3 bln yuan
A trio of mid-sized entrepreneurial companies are in the IPO headlines, including one headed for New York, another opting for Shanghai and a third eyeing a possible listing on Hong Kong’s underutilized board for high-growth companies. The first of the trio, which will make its trading debut this week in New York, comes from micro lender China Lending Corp (Nasdaq: CLDC). The second comes from China Film Co, the nation’s largest movie distributor; and the third comes from baby products seller and online community operator Babytree, which has just raised a nifty 3 billion yuan in pre-IPO funding. Read Full Post…
Bottom line: Postal Savings Bank’s IPO is likely to get a moderately strong reception and come close to the upper end of its $10 billion target, while Yum China’s IPO is unlikely to come until the end of this year at earliest.
Yum China spin off plans hit delays
What’s likely to become the world’s biggest IPO in 2 years has just officially launched in Hong Kong, with word that China’s Postal Savings Bank has made its first filing for an offering that could raise up to $10 billion. Meantime, another high-profile IPO by the Chinese unit of fast-food giant Yum Brands (NYSE: YUM) is getting hit by delays, as operator of the KFC chain seeks key local backers in the run-up to a listing that could also come in Hong Kong. The Yum offering could also be quite large at around $2 billion, though it appears the deal may not come now until the end of this year or may even get pushed back to 2017. Read Full Post…
Bottom line: A new IPO from Postal Savings Bank will price and debut strongly thanks to its conservative stance, while another offering from Orient Securities could also do moderately well due to its small size.
Postal Bank set for mega-IPO in HK
Two financial institutions are lining up to launch IPOs in Hong Kong this week, led by what’s likely to be the biggest offering this year by China’s stodgy Postal Savings Bank, whose listing could raise up to $8 billion. In a far smaller deal, brokerage Orient Securities is also set to announce a HK$1.15 billion ($174 million) IPO deal as soon as today, in what looks like a slightly desperate bid for cash following its much larger Shanghai listing last year at the height of China’s stock market boom. Read Full Post…
Bottom line: Jack Ma’s newly stated preference for an Ant Financial IPO in Hong Kong could touch off a new clash that would challenge the local securities regulator to grant an unusual listing exception or risk losing the blockbuster deal to New York.
Ant Financial eyes HK IPO
Just a couple of years after a high-profile tussle that saw e-commerce giant Alibaba (NYSE: BABA) ditch Hong Kong to make its record-breaking IPO in New York, talkative founder Jack Ma is gearing up for a similar game of chicken for an upcoming IPO by his company’s affiliated Ant Financial unit. That’s my initial assessment, following media reports that Ma has said his first preference would be a Hong Kong IPO for Ant Financial, China’s leading private financial services company whose prize asset is its Alipay electronic payments service. Read Full Post…
Bottom line: A backdoor listing plan by SF Express in Shenzhen, a New York IPO plan by China Music Corp and 3 new China OTC listings by ZTE units reflect creative approaches to new listings by Chinese firms due to bottlenecks for traditional IPOs.
SF Express eyes backdoor listing
A trio of IPO stories in the headlines are quite revealing, as none are happening through traditional channels on China’s 3 main stock exchanges in Shanghai and Shenzhen. Instead, the largest of the 3 plans has parcel delivery giant SF Express eyeing a backdoor listing using a shell company from the minerals business. Meantime, music streaming company China Music Corp has popped up across the Pacific in New York, where it is reportedly planning an IPO that could be the largest of its kind this year. Read Full Post…
Bottom line: A strong field of cornerstone investors indicates BOC Aviation’s IPO could post moderate gains in its trading debut, while Didi’s IPO plan shows that New York remains an attractive option for Chinese firms that are leaders in their sectors.
Fosun, Boeing buy into BOC Aviation
A couple of major IPOs are in the headlines today, led by some encouraging signs for an upcoming listing from BOC Aviation, the aircraft leasing arm of Bank of China (HKEx: 3988; Shanghai: 601398) that’s in the process of making a $1.1 billion offering in Hong Kong. Meantime, we’re getting some of the first concrete signals of the IPO plans for Didi Chuxing, the homegrown Chinese equivalent of Uber, which is reportedly eyeing a US listing in 2018.
Let’s jump right in with BOC Aviation, which looks like an attractive IPO to me since it should benefit from China’s booming demand for air travel. Yet despite that potential, the offer has stumbled somewhat since Bank of China first announced its plans to make a separate listing for the unit back in March. BOC Aviation was initially hoping to raise up to $1.5 billion, but pared the amount back to the current $1.1 billion after meeting with lukewarm demand due to recent market volatility. Read Full Post…
Bottom line: Meituan-Dianping’s IPO is likely to raise more than $2 billion and should get a strong reception when it comes, most likely by mid-year in New York, while ZTO Express’ $1-$2 billion IPO will get a cooler reception due to its steep losses.
Meituan-Dianping eyes IPO
After a quiet start to the year, the market for offshore Chinese IPOs is slowing coming to life with word of 2 listing plans that should both top the $1 billion mark. One would see leading group buying site Meituan-Dianping list, most likely in New York or possibly Hong Kong, in a deal that would probably raise at least $2 billion. The second is also Internet-related, and would see parcel delivery giant ZTO Express also raise up to $2 billion in a New York IPO.
Perhaps not surprisingly, both of these companies are losing money despite their position as industry leaders. That’s because competition has been cut-throat in both spaces, especially in the parcel delivery business that supports China’s booming e-commerce sector. Meituan and Dianping were also locked in heated competition before they merged late last year to face the current company, which still faces stiff competition from 2 of China’s leading Internet companies, Baidu(Nasdaq: BIDU) and Alibaba (NYSE: BABA). Read Full Post…
Bottom line: Canadian Solar’s Recurrent Energy unit is likely to make its first public filing for a New York IPO in the next 2 weeks and should get a positive reception, while Jumei is likely to quietly de-list from the US in the next 3-4 months.
Recurrent Energy gets big new financing
One of the few Chinese IPOs likely to happen in New York this year is moving closer to the launch gate, with word of major new financing for the power plant-building unit of solar panel maker Canadian Solar (Nasdaq: CSIQ). But while that IPO for Recurrent Energy moves closer to the IPO gate, announcement of a new privatization bid for online cosmetics seller Jumei International (NYSE: JMEI) is far more typical for the market these days.
This pair of stories reflect a growing new reality for US-listed Chinese companies. That reality is seeing some of China’s leading private companies choose New York for their listings, banking on interest from global investors seeking to buy into the China growth story. At the same time, many smaller lesser-known Chinese companies listed in New York have discovered US investors are far less interested in their stories, and are privatizing with plans to re-list and hopefully get higher valuations back in China. Read Full Post…
Bottom line: Hong Kong’s IPO market will heat up in the first quarter of next year for non-financial Chinese offerings, while privatizations of Chinese firms from New York are likely to accelerate at raised offering prices.
Taomee, Wuxi Pharma join homeward migration
A series of new listings in Hong Kong and de-listings from New York are heating up the headlines as we head toward year-end, reflecting 2 of the major themes for 2015 IPOs. Hong Kong hasn’t exactly been a hotbed for new listings this year, but has been gaining recent momentum that includes news of a $300 million planned IPO by hotpot chain Haidilao. At the same time, other reports are saying that Bank of Zhengzhou has just launched its own Hong Kong IPO, spotlighting another trend that has seen a flurry of mainland Chinese banks try to tap the market to bolster their financially-stretched balance sheets.
Meantime across the Pacific in New York, children’s website Taomee (NYSE: TAOM) and drug maker Wuxi PharmaTech (NYSE: WX) have come closer to completing previously announced privatization plans, as part of a broader exodus of Chinese companies from the US. The former case has Taomee announcing it has formally signed a buyout deal to privatize the company, and Wuxi Pharma saying it has completed its own privatization. Read Full Post…
Bottom line: Weak pricing for Dali Foods’ Hong Kong IPO reflects investor uncertainty about China’s economy and stock markets, though the shares could briefly rise on their debut due to support from state-backed investors.
IPO for snack maker Dali draws tepid demand
A lukewarm reception for an upcoming IPO from snack maker Dali Foods is providing the latest evidence that global appetite for Chinese offerings is still quite wobbly. Dali has cut the size of its fund-raising plan by about 20 percent, following in the footsteps of China’s oldest investment bank CICC (HKEx: 3908), which made a similar reduction for its IPO whose shares made their trading debut last week.
The weak sentiment reflects uncertainty about China’s domestic stock markets, which reflects uncertainty about the nation’s broader economy that is showing signs of slowing. Hong Kong’s stock markets have become increasingly synced with far more volatile mainland stock markets, which soared in the first half of this year, only to come crashing back to earth during a massive summer sell-off. Read Full Post…
