Chery Automobile Shares Explode in Hong Kong Debut Following $1.2 Billion IPO
Shares for the Chinese car manufacturer Chery Automobile surged by more than ten percent in morning trading on the Hong Kong Stock Exchange on Thursday, marking the company’s debut after its $1.2 billion Initial Public Offering (IPO).
Chery, known for brands including Chery, Jetour, and iCAR, is capitalizing on robust investor interest as it aggressively increases its footprint in the highly competitive electric and smart vehicle sectors. The stock commenced trading at HK$34.2, outperforming the overall market, as the Hang Seng Index was up by only 0.1% at the time.
The company had previously sold 297.4 million shares at a price of HK$30.75 each, valuing the automaker at nearly $23 billion. This public offering ranks as the second-largest in Hong Kong thus far this year. The shares were priced at the highest point of the HK$27.75 to HK$30.75 range specified for investors when the offering was initially launched.
Documents submitted by Chery demonstrated exceptional demand: the institutional segment of the deal was oversubscribed more than eleven times, and the retail portion achieved coverage of 308 times.
Cornerstone investors committed $587 million to the IPO, amounting to nearly half of the total deal value. The company’s prospectus indicated that the state-owned China's Enterprise Mixed-Ownership Reform Fund acquired equity worth approximately $190 million, while the private equity firm Hillhouse subscribed for $60 million.
Chery stated its intention to allocate 35% of the capital raised from the IPO toward research and development for various passenger automobile types and expanding its offerings. An additional 25% will be dedicated to developing its next-generation vehicles over the subsequent three years.
In a related market context, Zijin Gold International is currently conducting a $3.2 billion public offering, with its stock slated to begin trading on Tuesday. This will be the largest IPO of its nature in Hong Kong in four years.
