Ferretti, the Italian maker of luxury yachts controlled by Chinese state-owned Weichai Group, kicks off its Hong Kong initial public offering on Tuesday, targeting US$301.6 million. It is the first Italy-based business to list its shares in the city for 12 years. The company, which makes vessels including super yachts of up to 312 feet in length, is selling 83.6 million shares at HK$21.82 (US$2.79 million) to HK$28.24 each. The retail offering will end on Friday, and the listing on the main board under stock code “9638” is scheduled for March 31. There is an overallotment option to up to 12.5 million more shares if there is strong demand. Ferretti has already secured five cornerstone investors that have committed to put about US$130 million into the institutional tranche of the offering. They include local government-linked funds such as Hainan Free Trade Port Fund and Sanya Development Holdings. Other investors include Sunshine Insurance. “We have chosen Hong Kong as the listing venue as it is an international capital market,” said chairman Tan Xuguang. It would also enable Ferretti to start expanding from Hong Kong and Hainan, the southernmost island of China, into other Asian markets such as Singapore and Vietnam, he said. The company, which operates six shipyards in Italy, is owned 86.1 per cent by heavy-duty vehicle maker Weichai Group, and 11.1 per cent by a joint venture co-owned by Italian billionaire Piero Ferrari, vice-president of the luxury sports car marque of the same name. Ferretti will become the second Italian luxury brand to list in Hong Kong, after Prada which listed on the main board in 2011. But unlike Ferretti, the Milan-based luxury fashion house is tightly-controlled by its founders, the Prada family, and its billionaire chief executive, Patrizio Bertelli. The company’s IPO comes as some wealthy Russian owners of superyachts are being targeted by sanctions following the Russian invasion of Ukraine. Ferretti said it had no pending orders to Russian oligarchs, and that the contribution from Russia and Ukraine to its sales is limited to just 3 per cent of total revenue over the past three years. “Although the invasion may result in rises in energy prices and raw materials costs, we believe that the impact on us will be minimal as we are not engaged in an energy-intensive business,” it said in the prospectus. The share sale also comes as the fierce Omicron variant of the coronavirus ensures international travellers cannot reach Hong Kong even as other countries outside the region have begun to reopen their borders. But the pandemic has provided new opportunities for the business, said chief executive Alberto Galassi, during a briefing live-streamed to Hong Kong on Monday. “The lockdown in Europe means we can’t go [hiking in the] mountains. If you have a boat, if one country stays open in Europe, you have the freedom [to travel there in a yacht]. That’s a super power to the rich,” he said. Ferretti plans to use the net proceeds from the IPO to develop new models and expand ancillary services such as yacht brokerage, aftersales and refitting services. For the nine months ended September 2021, Ferretti’s net profit was €32.1 million (US$35.4 million), up from €5.7 million in the same period a year earlier. Total orders for new vessels was €821.8 million for the period, compared to €541.8 million for the whole of 2020. The share sale has come amid a fundraising dry spell in Hong Kong. Year to date, just nine companies have raised about US$1.4 billion in Hong Kong, a far cry from the US$14 billion raised by 27 IPOs in the same period a year ago, data from Refinitiv shows. CICC is the sole sponsor of the deal.