SYDNEY, (Reuters) – Shares of Chinese car maker Chery Automobile jumped 11.2% as the company started trading on the Hong Kong Stock Exchange on Thursday following its $1.2 billion initial public offering.
Chery, best known for its Chery, Jetour and iCAR brands, is tapping investor appetite as it expands in the competitive electric and smart vehicle market.
The stock opened at HK$34.2, while the Hang Seng Index was up 0.1%.
Chery last week sold 297.4 million shares at HK$30.75 each in the second-largest IPO in Hong Kong so far this year, valuing it at almost $23 billion.
Its shares were sold at the top of the HK$27.75 to HK$30.75 price range flagged to investors when the deal was launched.
The institutional tranche of the deal was oversubscribed 11.6 times, while the retail portion was 308 times covered, Chery’s filings showed.
Cornerstone investors bought $587 million in the IPO, almost half of the deal, the prospectus showed.
China’s Enterprise Mixed-Ownership Reform Fund, a state-owned firm, took about $190 million worth of stock and private equity group Hillhouse subscribed for $60 million, Chery’s prospectus showed.
Chery said it would use 35% of the IPO proceeds for research and development on passenger vehicles of different models and further expand its product portfolio.
A further 25% would be spent on developing its next-generation vehicle in the next three years.
Zijin Gold International is currently raising $3.2 billion in an IPO and its shares are due to start trading on Tuesday. That IPO will be the largest of its kind in Hong Kong in four years.
Reporting by Donny Kwok and Scott Murdoch; Editing by Muralikumar Anantharaman and Harikrishnan Nair
Source: worldautoforum.com
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