A woman walks past a billboard of Kuaishou, a short video app, in Beijing. (PHOTO BY A QING / FOR CHINA DAILY)
Kuaishou Technology surged in Hong Kong’s gray market trading, in a sign that one of the city’s biggest initial public offerings in years is off to a good start.
The short-video startup, backed by Tencent Holdings Ltd, advanced by as much as 181 percent to HK$322.80 on Thursday on an over-the-counter retail platform operated by Phillip Securities Group. If the stock rises by as much during its debut on Friday, it would become the second-best debut for an IPO over US$1 billion in Hong Kong on record, data compiled by Bloomberg shows.
Interest in the popular video service operator underscores the enormous appetite investors still have for IPOs in the Hong Kong.
Meanwhile, shares jumped as much as 200 percent on the Bright Smart Securities International (HK) Ltd. platform and up to 266 percent on the Futu Securities International (Hong Kong) Ltd platform.
Kuaishou’s shares were more than 1,200 times covered in the retail segment, making it the most popular IPO over US$1 billion in the city in history, according to data compiled by Bloomberg. The technology company received about 1.4 million applications from local investors, meaning that one of every five people in the city subscribed to buy shares.
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Interest in the popular video service operator underscores the enormous appetite investors still have for IPOs in the city. Last year, Hong Kong saw a flood of largely successful listings, with hot debuts like JD.com and NetEase Inc helping push total new share issuance by value to record levels. New stocks in 2020 have risen by an average of about 70 percent since their debuts. The momentum extended into this year with Yidu Tech Inc. jumping 148 percent on its debut while Strawbear Entertainment Group shares soared 84 percent.
Kuaishou raised HK$42 billion (US$5.4 billion) after pricing its sale of 365 million shares at HK$115 apiece, which was the top end of a marketed range, according to terms for the deal obtained by Bloomberg News. The IPO pricing values the firm at US$60.9 billion.
The company sold just 6 percent of its offering to retail investors, while the rest were for institutions. Some trades were executed for HK$250 apiece in gray market trading by institutional investors earlier this week, according to people familiar with the matter, more than double the listing price. That’s also a bigger premium than the 50 percent jump on Ant Group Co’s planned offering before it was scrapped.
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In a so-called gray market, investors can bid for new shares before they officially start trading on an exchange. The over-the-counter mechanism is often seen as an early indicator of investor demand for the new listing.