Reuters: Chery Shares Jump 11.2% After $1.2B Hong Kong IPO

Chery Automobile (9973.HK) experienced a successful Hong Kong Stock Exchange debut, with shares rising 11.2% to HK$34.2, surpassing the IPO price of HK$30.75 amidst a 0.1% increase in the Hang Seng Index. The IPO, the second-largest in Hong Kong this year, generated $1.2 billion, valuing the Chinese automaker at nearly $23 billion. The offering comprised 297.4 million shares priced at the top of the indicated range. Strong investor demand resulted in significant oversubscription, with the institutional portion oversubscribed 11.6 times and the retail tranche oversubscribed 308 times, demonstrating confidence in Chery's expansion within the electric and smart vehicle sectors. Chery’s portfolio includes the Chery, Jetour, and iCAR brands. Cornerstone investors acquired approximately half of the deal, totaling $587 million. China's Enterprise Mixed-Ownership Reform Fund, a state-owned entity, invested around $190 million, while private equity firm Hillhouse subscribed for $60 million, as outlined in the prospectus. This offering underscores the attractiveness of EV manufacturers in the current investment climate. Chery intends to allocate 35% of the IPO proceeds to research and development, focusing on its passenger vehicle models and expanding its product offerings. A further 25% is designated for developing next-generation vehicles over the next three years. The market awaits a potential $3.2 billion IPO from Zijin Gold International, which could be the largest in Hong Kong in four years.