Chinese Car Maintenance Firm Tuhu Car’s Shares Open Unchanged in Hong Kong IPO
Chinese car maintenance firm Tuhu Car has made its debut on the Hong Kong Stock Exchange, with shares opening at the same price as their HK$28 ($3.58) issue price. The company successfully raised $152 million in its initial public offering (IPO) by pricing its shares at the lower end of the range communicated to investors. The IPO involved the sale of 42.44 million shares, slightly exceeding the original plan of 40.61 million shares.
Tuhu Car’s decision to set the share price at the lower end of the HK$28 to HK$31 range reflects the current state of market demand for new share sales, which has remained weak. This trend is evident in other IPOs such as AI startup Beijing Fourth Paradigm and hospital cloud software firm Neusoft Xikang, both of which priced their shares at the low end of their respective ranges. The international tranche of Tuhu’s IPO was 2.3 times oversubscribed, while retail demand was 2.67 times the number of shares available.
The oversubscription rates for Tuhu Car’s IPO are considered low compared to Hong Kong’s typical IPOs, which are often oversubscribed by thousands of times due to the city’s large number of retail investors seeking quick returns. The sluggish IPO market in Hong Kong has been attributed to higher global interest rates and stricter regulations imposed by Chinese authorities on companies seeking to list on overseas exchanges. In the first nine months of 2023, Hong Kong has witnessed less than $3 billion worth of IPOs, a decrease from the $4 billion recorded during the same period last year.
Despite the challenges faced by Tuhu Car and other IPOs in Hong Kong, the company’s debut on the stock exchange marks an important milestone in its growth journey. Investors will closely monitor the performance of its shares in the coming days as an indicator of market sentiment and demand.
In conclusion, Tuhu Car’s shares remain unchanged in their Hong Kong IPO, indicating a subdued market response. The company successfully raised $152 million by pricing its shares at the lower end of the range. This IPO reflects the overall weak demand for new share sales in Hong Kong, which is attributed to global interest rates and regulations imposed by Chinese authorities. The future performance of Tuhu Car’s shares will be closely watched by investors and industry observers.
