Hong Kong Largest IPO Since 2021, Midea Shares hiked on the first day

Midea Shares: Midea Group recently launched the city’s biggest initial public offering (IPO) in the past three years, on the first day in Hong Kong shares of Midea Group went up significantly.

When Midea chief Paul Fang Hongbo held the ceremonial gong at Hong Kong’s stock exchange to initiate trading, shares of the world’s biggest manufacturer of home appliances changed hands for HK$59.20 each as reported by scmp.com.

The stock code of these shares was 0300 and the shares became the most traded stock in the city and were worth HK$59.10.

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The company reported that it earned HK$31.01 billion (US$3.98 billion) last week after offering shares for HK$54.80 per share. The company also has a choice to sell 15% more shares to meet the excess demand that caused the issue to be oversubscribed by 8.1 times and public investors booked by 5.3 times.

Bonnie Chan Yiting, the CEO of Hong Kong Exchanges and Clearing Limited reported that because of investors strong interest in the company shares, the company may choose an overallotment option which could lead to an increase in the size of the deal to US$4.6 billion.

As per the data from the stock exchanges, based on the opening premium Midea is valued at HK$29.08 billion. The London Stock Exchange Group reported that the IPO is bigger than JD Logistics’ public offering of US$3.64 billion in May 2021.

Cornerstone investors planned to buy US$1.26 billion of Midea shares and promised to held the shares for at least six months. These cornerstone investors includes Cosco Shipping Holdings (Hong Kong), UBS Asset Management (Singapore), China Structural Reform Fund II, and Golden Link.

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Fang said before the start of the trading, “This is not merely another step in Midea’s plan in the capital markets, but also a strategic step forward in the company’s globalisation. We will continue to leverage our technology to benefit our customers, and strive for digital-driven breakthroughs, and consolidate our leading position as a global technology company.”

Forbes reported that He Xiangjian who founded Midea in 1968 now has an estimated net worth of US$22.9 billion. Midea is also the owner of the German industrial robots manufacturer ‘Kuka’.

The company reported that the money raised from the public subscription will be utilized for research and development, improving its manufacturing system and supply chain management, widening its sales and distribution channels, and the remaining money will be used for general business needs.

In the first half of this year, the company’s revenue went up by 10.3% against 218.1 billion yuan a year ago period. The company’s earnings also rose by 14% to 20.8 billion yuan. Reports also state that revenue from overseas also increased 13.1% from a year ago and the revenue from domestic went up by 8.4%.

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