Group to raise over HK $14 bln in third-largest IPO of year
Shares of Legend Holdings Corp, the Beijing-based parent of PC maker Lenovo Group Ltd, slipped slightly on their market debut Monday in Hong Kong.
Legend's shares opened up 0.4 percent at HK$43.15 ($5.57) and hit an initial high of HK$43.55 before retreating to close the day at HK$42.95.
The company said it expected to raise about HK$14.63 billion in net proceeds from its global offering after its IPO price was set at HK$42.98 per share, according to an announcement published Friday on its official website. Legend also said the IPO had been significantly oversubscribed as it had received investor orders for shares approximately 45.17 times of the shares initially offered.
It marked the third-largest IPO in Hong Kong this year, following Chinese brokerage companies Huatai Securities Co and GF Securities Co, which raised about HK$35 billion in May and HK$27.90 billion in March, respectively.
Liu Chuanzhi, chairman and co-founder of Legend, said at the debut ceremony Monday that the company would not care too much about the ups and downs of its stock price, instead it would rather pay attention to the long-term development of its businesses, especially in the fields of consumer products and services.
When asked why Legend chose to get listed in Hong Kong instead of on the mainland bourses, Liu said at a press conference Monday that a Hong Kong listing is more standardized and mainland investors can still invest in the company's shares through the Shanghai-Hong Kong Stock Connect program if they want.
"Large Chinese companies, especially the State-owned ones, often choose the Hong Kong market as their listing destination because the equity market there is big enough to meet their massive capital requirements," Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, told the Global Times Monday. "Also, since the Hong Kong market is open to global investors, part of the IPO funds could be raised in the US dollar or other foreign currencies, making it easier for companies' future investment overseas."
Moreover, a Hong Kong listing could greatly enhance a company's profile in the global market, enabling it to attract strategic investors across the world, Dong noted.
"To a certain extent, Legend's choice shows that mainland exchanges still lag behind the Hong Kong bourse in terms of openness and standardization," an analyst from a Shanghai-based brokerage told the Global Times Monday on condition of anonymity.
Liu, the chairman, didn't rule out the possibility of a mainland listing for the company, but he said it's up to the company's decision.
Besides Lenovo, Legend also has interests in real estate, private equity and a wide variety of other businesses such as China Auto Rental Holdings and Union Insurance Broker Co. It plans to set aside 55 to 60 percent of the IPO funds as strategic investment, the China Business News reported Monday.
