Hong Kong IPOs outshine broader market spurred by inflows from global, Chinese funds
Shares of Chinese bubble-tea chain Auntea Jenny surge as they join growing list of companies with stellar debuts
Favourable market conditions backed by capital inflows and investor enthusiasm have led to strong showings by initial public offerings (IPOs) in Hong Kong this year.
The first-day performance of new listings has been generally positive, with some companies showing exceptional gains. Chinese bubble-tea chain Auntea Jenny surged as much as 75 per cent on Thursday from its IPO price of HK$113.12, before ending the day 40 per cent higher. The broader Hang Seng Index advanced 0.4 per cent.
It followed a 38.3 per cent gain on Wednesday by Breton Technology, which is backed by Chinese electric vehicle maker Xpeng. Last month, Duality Biotherapeutics surged 116.7 per cent, and China’s largest fresh-drinks chain, Mixue Group, added 43.2 per cent on March 3.
While the performance of IPOs depends on companies’ business fundamentals and prospects, the stock market has recently been propped up by strong capital flows, both from global and mainland-based funds, analysts said.
“We observed a sustained inflow of funds, spurred by renewed global interest in China-related opportunities, particularly in artificial intelligence and innovation,” said Edward Au, managing partner for the southern region at Deloitte China.