Chip maker SMIC more than doubles Shanghai share sale to US$6.5 billion after spike in Hong Kong-listed stock
- China’s top semiconductor foundry prices share at 27.46 yuan each
- Deal’s underwriter has the option to expand the offer size by 15 per cent
China’s Semiconductor Manufacturing International Corp (SMIC) will raise 46.29 billion yuan (US$6.55 billion) in a Shanghai share sale, more than double its initial target, pricing its offering following a surge in its Hong Kong-listed stock.
The offering values the company at 109.25 times its 2019 earnings, based on the expanded share base, according to the filing. By comparison, rival Taiwan Semiconductor Manufacturing Co (TSMC) has a trailing price-earnings ratio of 21.315.
SMIC’s fundraising comes as the Shanghai-based firm bulks up its war chest amid broader tech-related tensions between the United States and China, and will be used to fund projects and replenish operating capital.
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SMIC’s Hong Kong-listed shares rose more than 5 per cent on Friday to HK$33.25, and have surged 172.5 per cent since the end of March.
The deal’s underwriter, Haitong Securities, has the option to expand the offer size by 15 per cent, meaning SMIC can raise as much as 53.23 billion yuan.
The institutional portion of the deal was nearly 165 times subscribed, the company said.
Two big sovereign wealth funds, Singapore’s GIC and Abu Dhabi Investment Authority, subscribed as strategic investors for shares worth 3 billion yuan and 400 million yuan, respectively, SMIC said.
China’s National Integrated Circuit Industry Investment Fund, popularly known as “the big fund”, is investing 3.5 billion yuan in the company, SMIC said.
SMIC’s online subscription, mainly targeting individual investors, will start on Tuesday, it said.
