Editorial | Midea provides light at end of Hong Kong IPO tunnel
Blockbuster debut by world’s largest maker of home appliances on city stock exchange raises hopes of more mega deals
Are mega deals making a comeback after a long drought in Hong Kong’s once storied IPO market? That looks like it if Midea Group’s market debut is any indication.
The world’s largest maker of home appliances rose a solid 8 per cent on its first day of trading, after raising HK$31 billion (US$3.98 billion) with its initial public offering, which was more than eight times oversubscribed by international investors and more than five times by retail buyers. It exceeded JD Logistics’ US$3.64 billion offering in 2021.
A “greenshoe” option, which allows the Foshan-based company to release more shares to meet high demands, could be exercised to add 15 per cent to the fundraising total, making it the world’s second-biggest IPO this year.
Certainly the market mood has turned rosier. A day after the IPO, the US Federal Reserve lowered its benchmark interest rate by a half percentage point in an aggressive start to a monetary loosening cycle.
A strong pipeline of IPOs is expected for the rest of the year and well into the next. The Hong Kong stock exchange is currently processing 106 listing applications with 40 IPOs by the end of June.
