How to conduct an IPO in volatile markets: keep it small and conference call investors
- Internet roadshows, cornerstone investors, small deals help IPOs complete in Hong Kong
- Total funds raised in city for January, February down 16 per cent year on year
Xingye Wulian Service, a Henan-based property company, celebrated its HK$200 million (US$25 million) listing in Hong Kong on March 9 after road-testing a new way of gathering investors: over the internet.
Traditionally, IPO underwriters and the company’s management make a series of pit stops in financial hubs from New York to Tokyo, pitching the deal to potential investors. During the coronavirus epidemic, companies have switched to making presentations online and via teleconferencing.
Many of these Chinese companies list in Hong Kong, the world’s biggest IPO market last year. They may have valuable lessons to offer other market debutantes around the world and point to the new normal for IPO bankers and investors.
“If the coronavirus drags on, and travel bans and quarantine measures are not lifted soon we would likely continue with using internet roadshow for other issuers we are helping to list,” said Han Dong, at Hong Kong-based brokerage Zhongtai International which advised the property company.