SMIC on track to float China’s largest offering in 10 years as national pride fires up buying interest in chip maker
- China’s top chip maker skyrocketed more than 50 per cent over the past four sessions
- SMIC to debut its A shares in Shanghai this month, source says
Semiconductor Manufacturing International Corp (SMIC), China’s top chip maker, is set to draw heavy subscriptions when it begins offering its 1.686 billion shares to mainland investors on Tuesday, putting the share flotation well on its way to becoming the largest in the A-share market since 2010.
The buzz around SMIC has sent its Hong Kong-listed shares soaring.
Its shares shot up 21 per cent to HK$40.10 on Monday, marking a fresh all-time high, and they have skyrocketed 236 per cent so far this year. The Hong Kong shares traded at about a 32.8 per cent premium to the A-share offering price.
“Investors believe the stock will rocket once listed in A share market. And with a new round of capital, the company can increase capital expenditures for research and development,” Kenny Wen, wealth management strategist at Everbright Sun Hung Kai, said of SMIC’s four-day winning streak over which it gained nearly 51 per cent.
A potential subscription euphoria surrounding the company, buoyed by an influx of fresh capital, will spark worries about a boom-to-bust cycle in an often-arcane A-share market that frequently leaves small investors to lick their wounds.