Zijin Gold makes solid Hong Kong trading debut as shares jump 56%

Three Chinese mainland companies made stellar trading debuts on the Hong Kong stock exchange on Tuesday, burnishing the city’s credentials as the world’s top fundraising market. All three companies’ shares opened higher, with watch designer and manufacturer Shenzhen Hipine Precision leading the surge, opening with a 184 per cent gain from its offer price of HK$29.60. It closed up 258 per cent at HK$106. Trading under the stock code 2259, gold miner Zijin Gold International’s shares opened at HK$111.50, up 56 per cent from the offer price of HK$71.59. It traded as high as HK$123 per share before closing at HK$120.60. Pateo Connect Technology (Shanghai), which provides technology for electric-vehicle cockpits, first traded at HK$135, a premium of 32 per cent from its initial public offering (IPO) price. It closed at HK$157. The Hang Seng Index rose 0.9 per cent. Zijin Gold, a spin-off of the international unit of Hong Kong-listed Zijin Mining, raised HK$24.98 billion (US$3.21 billion) from its IPO, the city’s second-largest this year. It sold 349 million shares in its primary listing, with about 90 per cent allocated to international investors and the remainder offered to retail investors in the city. The public tranche was 241 times oversubscribed, while the international tranche drew demand of about 20 times the available shares. An overallocation option allowed for the issuance of an additional 52.35 million shares. The blockbuster listing, which was pushed back a day by Super Typhoon Ragasa, marked the city’s second-largest IPO after the US$5.3 billion offering of Contemporary Amperex Technology in May. Zijin Gold’s production reached 1.3 million ounces last year, ranking ninth globally in reserves. The Hong Kong government is ramping up efforts to develop Hong Kong into a regional gold reserve hub, targeting gold storage capacity of more than 2,000 tonnes within three years, according to the latest policy address. “Gold, with its combined attributes of currency, commodity and financial asset, has long served as an important allocation tool for global investors and, in recent years, has also become a key asset for hedging against various geopolitical and market risks,” said Secretary for Financial Services and the Treasury Christopher Hui Ching-yu on Tuesday. Dual listed in Hong Kong and Shanghai, parent company Zijin Mining “has now developed into a leading multinational group in the global metals industry, with a market capitalisation exceeding HK$850 billion”, said Lin Hongfu, non-executive director of Zijin Gold, before striking one of the ceremonial gongs at a listing ceremony at the headquarters of bourse operator Hong Kong Exchanges and Clearing on Tuesday. “Zijin Gold International is the core platform for Zijin Mining’s overseas gold assets. Today, as we ring the bell once again, it heralds the reopening of a dazzling golden era.” Zijin Gold planned to allocate about half of the IPO’s net proceeds to upgrading and expanding existing mines over the next five years to boost production capacity. About 33 per cent would be used to complete its acquisition of the Raygorodok Gold Mine in Kazakhstan, while the rest would be spent on exploration in all the mines it operated and on general corporate purposes. The company holds interests in eight gold mines across Central Asia, South America, Oceania and Africa. The listing attracted cornerstone investors including Singapore sovereign wealth fund GIC, private equity firm Hillhouse, US investment company BlackRock and British asset manager Schroders. Founded in 2000 in eastern Fujian province, Zijin Mining is engaged in the exploration, mining, processing, smelting, refining and sale of gold and other mineral resources in China. Zijin Mining controlled 86.7 per cent of the shares after the listing. Hipine raised HK$313.76 million through its Hong Kong stock offering, while Pateo raised HK$1.07 billion. In the first nine months, the city’s bourse raised US$23.27 billion through 66 listings, more than triple the amount raised during the same period a year earlier and US$6.74 billion ahead of the New York Stock Exchange, the world’s second-largest fundraising venue, according to data released on Tuesday by London Stock Exchange Group. Among notable additions to the city’s IPO pipeline, Tencent Holdings-backed AI-enabled medical services provider WeDoctor revived its IPO plan, filing a new application on Monday. “Increased international capital inflows and positive market sentiment have boosted liquidity in Hong Kong,” said Frank Bi, Asia head of corporate transactions at law firm Ashurst. Additional listings, including by firms already listed on mainland exchanges, are expected to further stimulate market activity and enhance liquidity, he added.

Zijin Gold makes solid Hong Kong trading debut as shares jump 56%

Three mainland Chinese companies make strong debuts, adding to Hong Kong’s lustre as world’s leading fundraising venue