China’s biggest pork producer Muyuan flat in Hong Kong share debut
Firm’s US$1.4 billion IPO records lower oversubscription rate than other recent listings, reflecting a cooling of the red-hot market
Shares of China’s biggest pig breeder Muyuan Foods opened flat in their Hong Kong debut on Friday, reflecting a cooling in the city’s red-hot initial public offering (IPO) market as retail investors turn more cautious.
The world’s largest hog firm’s shares first changed hands at the offer price of HK$39 and gained 3.9 per cent to HK$40.52 at the close, as the firm’s long-term growth prospects gained footing.
Muyuan raised HK$10.7 billion (US$1.4 billion) after pricing the shares at the top of the marketed range, which marked a discount of more than 25 per cent versus its Shenzhen-traded shares based on Thursday’s close. Hong Kong shares, or H shares, typically trade at a discount compared with their counterparts in mainland China (A shares) to attract investors.
“Given the AH price gap, it’s very unlikely to trade near A-share levels,” said Dickie Wong, executive director of research at uSmart Securities.