More than 70 per cent of new Hong Kong listings ended 2021 below their IPO price, hit hard by Beijing’s tech crackdown
- Eight of the 10 largest IPOs in Hong Kong last year would have delivered losses to investors who held the shares until the end of the year
- The only winners among the large IPOs were electric car makers Xpeng and Li Auto
Last year was a write off for investors hoping to profit from new listings, with over 70 per cent of the 96 initial public offerings in Hong Kong trading below their offering price by December 31, most suffering collateral damage from China’s regulatory crackdown on the technology sector.
Eight of the 10 largest Hong Kong IPOs in 2021 would have delivered losses to their investors if they held the stocks until December 31, according to data from Refinitiv and Everbright Sun Hung Kai.
Short video-sharing platform operator Kuaishou Technology was the largest and most popular new listing in the city last year – and among the biggest losers. The stock finished 2021 at HK$72.05, down 37 per cent from its offer price of HK$115 in January, when the company raised US$6.2 billion.
However, short term investors who offloaded the stock on its debut were handsomely rewarded, as it closed the first day of trading at HK$300, more than double the offer price.
Shares of Kuaishou, which means “quick hand”, climbed to a peak of HK$415 two weeks after its listing, but in July the stock plummeted to below its IPO price after Beijing started to tighten regulation of the tech sector.
A similar pattern could be found in most of the other top 10 new listings, which were dominated by tech stocks that were hit the hardest by the crackdown.
When comparing their year-end close and original offering price, JD Logistics fell 34 per cent while search engine Baidu plunged 43 per cent. They were 2021’s second- and third-largest IPOs respectively, raising over a combined US$6.6 billion.
Bilibili, another video-sharing platform, lost 56 per cent, Linklogis plummeted 58 per cent, online travel platform Trip.com Group ended down 29 per cent, while Shenzhen-listed Asymchem Laboratories Tianjin fell 18 per cent from listing to year-end.