Zhongji's $1.2B Buy-Back Ahead of Hong Kong IPO
Optical-module maker Zhongji announced a US$1.2 billion buy-back of its yuan-denominated shares just before its Hong Kong IPO, aiming to stabilize pricing. The buy-back follows a sell-off in its onshore stock, which was approaching the HK$980 offer price. A further decline could pressure Hong Kong-listed shares below the IPO price on debut, risking the company's offshore expansion plans. Fund manager Dai Ming of Huichen Asset Management noted the buy-back is likely to bolster sentiment and prevent a breach of the offer price, as overseas investors use yuan-traded prices as a reference.
Key facts
- Zhongji announced US$1.2 billion in buy-backs before its Hong Kong IPO.
- The buy-back targets yuan-denominated shares to anchor pricing.
- The onshore stock was closing in on the HK$980 offer price.
- A decline in onshore stock could push Hong Kong shares below IPO price.
- The company aims to expand overseas and build global investor image.
- Dai Ming, fund manager at Huichen Asset Management, commented on the timing.
- Overseas investors use yuan-traded stock prices as a reference for H shares.
- The buy-back may prevent a breach of the offer price.
Entities
Institutions
- Zhongji
- Huichen Asset Management
Locations
- Hong Kong
- China