Key Takeaways
- • Suzhou Dongshan Precision Manufacturing fell 2.1% in its Hong Kong trading debut on Wednesday after raising HK$9.88 billion ($1.26 billion) in its share sale, according to Reuters.
- • The stock opened at HK$82.40 against an offer price of HK$86.80 per share, which was about 7.5% below the HK$93.80 maximum price, and traded at HK$85 after the open.
- • Cornerstone investors were allocated 56.89 million shares, or 50% of the offer, including Aurora SF, JPMorgan Asset Management (Asia Pacific), Alibaba Investment and CPE Bodhi, and cannot sell for six months.
- • Retail subscription was weak at 0.52 times the shares initially set aside, while the international tranche was 3.17 times subscribed, with 5.47 million shares moved from retail to international.
- • Analysts cited a mediocre new-listing environment and a more selective investor base for AI supply-chain names, following a global tech selloff over AI spending returns.
Summary
Chinese printed circuit board maker Suzhou Dongshan Precision Manufacturing dropped 2.1% in its Hong Kong trading debut on Wednesday, after raising HK$9.88 billion ($1.26 billion) in its share sale, according to Reuters. The stock opened at HK$82.40 compared with its HK$86.80 offer price before climbing to HK$85, about 2.1% lower. Over the same session, the Hang Seng Index rose 0.25% and the Hang Seng Tech Index gained 1.22%.
Dongshan set its offer price at HK$86.80 per share, about 7.5% below its HK$93.80 maximum price, according to a stock exchange filing on Sunday. The company did not exercise its option to increase the deal size. Demand was uneven across tranches: Hong Kong retail investors subscribed for 0.52 times the shares initially set aside for them, while the international offering was 3.17 times subscribed, according to the allotment results filing on Tuesday. Dongshan moved 5.47 million shares from the Hong Kong retail tranche to the international offering.
Cornerstone investors were allocated 56.89 million shares, equal to 50% of the offer. The group included Aurora SF, JPMorgan Asset Management (Asia Pacific), Alibaba Investment and CPE Bodhi. Under the filing, cornerstone shares cannot be sold for six months.
Dongshan makes printed circuit boards, automotive parts, display modules and optical transceivers, which send data through fibre-optic cables, according to its listing prospectus. The company plans to use most of the proceeds to expand production of high-speed optical chips, optical modules and high-end circuit boards.
The debut came amid a global tech rout driven by renewed concerns over how long the AI spending boom can last and whether returns will justify heavy sector borrowing. Dickie Wong, executive director of research at uSMART Securities, said the new listing environment had been "quite mediocre lately" and that "a weak debut for Dongshan would not surprise me." He added that the AI supply-chain theme in Hong Kong "has already passed its most enthusiastic phase and investors have become more selective." Dongshan proceeded with the listing after Changzhou Microintelligence and Jiangsu Slender West Lake Culture and Tourism delayed their planned Hong Kong share sales citing market conditions.
Dongshan set its offer price at HK$86.80 per share, about 7.5% below its HK$93.80 maximum price, according to a stock exchange filing on Sunday. The company did not exercise its option to increase the deal size. Demand was uneven across tranches: Hong Kong retail investors subscribed for 0.52 times the shares initially set aside for them, while the international offering was 3.17 times subscribed, according to the allotment results filing on Tuesday. Dongshan moved 5.47 million shares from the Hong Kong retail tranche to the international offering.
Cornerstone investors were allocated 56.89 million shares, equal to 50% of the offer. The group included Aurora SF, JPMorgan Asset Management (Asia Pacific), Alibaba Investment and CPE Bodhi. Under the filing, cornerstone shares cannot be sold for six months.
Dongshan makes printed circuit boards, automotive parts, display modules and optical transceivers, which send data through fibre-optic cables, according to its listing prospectus. The company plans to use most of the proceeds to expand production of high-speed optical chips, optical modules and high-end circuit boards.
The debut came amid a global tech rout driven by renewed concerns over how long the AI spending boom can last and whether returns will justify heavy sector borrowing. Dickie Wong, executive director of research at uSMART Securities, said the new listing environment had been "quite mediocre lately" and that "a weak debut for Dongshan would not surprise me." He added that the AI supply-chain theme in Hong Kong "has already passed its most enthusiastic phase and investors have become more selective." Dongshan proceeded with the listing after Changzhou Microintelligence and Jiangsu Slender West Lake Culture and Tourism delayed their planned Hong Kong share sales citing market conditions.
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