Hong Kong’s IPO outlook brightens with SF Holding, Tong Ren Tang filing applications

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Hong Kong stock exchange’s IPO prospects has received a boost after fundraising in the city slumped to a two-decade low in the first half of the year

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SF Holding, the parent of courier operator SF Express, plans to issue 625.5 million shares in Hong Kong. Photo: Bloomberg

Aileen Chuang

Published: 9:00am, 29 Jun 2024

Initial public offerings (IPO) on the Hong Kong stock exchange, which slumped to a two-decade low in the year’s first half, are set for a revival, with a couple of mainland Chinese firms submitting applications on Friday to raise funds.

Shenzhen-listed SF Holding, the parent of courier operator SF Express, has taken a second stab at raising funds in the city after its initial application filed last August lapsed. It had reportedly sought to raise between US$1 billion and US$2 billion in February, lower than earlier estimates of as much as US$3.3 billion.

SF Holding plans to issue 625.5 million shares in Hong Kong, according to the approval it received from the China Security Regulatory Commission (CSRC) on May 31. In its application on Friday, SF Holding said it would use the proceeds to enhance and upgrade its logistics services in Asia, especially Southeast Asia.

Beijing Tong Ren Tang Healthcare Investment, China’s largest non-public traditional Chinese medicine hospital group, did not disclose the amount it plans to raise from its IPO. The proceeds will be used to upgrade its existing medical institutions up to 2028 through renovation and procurement of advanced medical equipment.

Goldman Sachs, Huatai Financial Holdings and JPMorgan are the sponsors of SF Holding’s deal, while CICC is the sole IPO sponsor of Beijing Tong Ren Tang.

SF Holding’s potential mega deal is what the Hong Kong primary market needs after fundraising on the main board of the Hong Kong stock exchange totalled US$1.5 billion in the first six months of the year, according to LSEG data released on Friday.

It was 35 per cent lower than a year earlier and the lowest since US$802 million was raised in the first half of 2003, when the severe acute respiratory syndrome virus derailed the city’s markets.