Midea Group started taking investor orders for its share sale in Hong Kong, which could be worth as much as US$3.5 billion ($4.57 billion) and be the city’s biggest listing in more than three years.
The Foshan-based appliance maker is offering 492.1 million shares at HK$52 to HK$54.80 ($8.71 to $9.18) apiece, according to its listing document dated Monday. At the low end of the marketed price range, that represents a 25% discount to the company’s Shenzhen-traded shares on Friday.
The company said it expects to price shares on Sept 13 and list on Sept 17. Bloomberg News previously reported that Midea was set to start taking orders this week.
Order books for the offering were covered as of Monday, according to people familiar with the matter, who asked not to be identified because they weren’t authorised to speak publicly. Midea declined to comment.
Cornerstone investors, who commit to keeping shares for at least six months, have agreed to buy US$1.26 billion in Midea stock, amounting to more than a third of the offering. They include a subsidiary of container-shipping company Cosco Shipping and a unit of UBS Asset Management.
Midea shares fell 3.1% in Shenzhen on Monday, leaving the company with a market value of about 427 billion yuan ($78.38 billion).
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Only US$2.5 billion has been raised in initial public offerings in Hong Kong so far this year, compared with more than US$50 billion in 2020. At the targeted size, Midea’s would be the biggest Hong Kong IPO since JD Logistics raised US$3.6 billion in May 2021.
Hong Kong hasn’t hosted a listing that’s raised more than US$1 billion since battery supplier CALB Group’s share sale in 2022.
Shares of JD Logistics, the delivery arm of e-commerce firm JD.com, have fallen about 76% since its listing. CALB is down 70% since October 2022.
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Midea’s IPO would be the biggest listing by a Chinese company since state-owned oil-and-gas producer Cnooc raised US$5 billion in April 2022, according to data compiled by Bloomberg.
Midea, founded in 1968, is China’s largest home-appliance maker. The company, which sells under brands including Midea, Comfee, Eureka and Little Swan, acquired Toshiba’s home-appliance business in 2016 and also owns German robotics firm Kuka.
Midea’s first-half net income rose 14% from a year earlier to 20.8 billion yuan, beating analyst estimates. Revenue rose 10% to about 217 billion yuan. Its shares have climbed about 15% this year in Shenzhen.
China International Capital and Bank of America are joint sponsors of the offering.
