China’s Midea moves ahead with Hong Kong’s likely biggest listing this year
Summary
Chinese appliance maker Midea Group has started taking orders from investors for an initial public offering to raise up to US$3.46 billion in Hong Kong.
Chinese appliance maker Midea Group has started taking orders from investors for an initial public offering to raise up to US$3.46 billion, which, if successful, would be the biggest such fundraising deal in Hong Kong this year.
Foshan-based Midea is selling a total of 492.14 million shares at a price range of HK$52.00-HK$54.80, equivalent to US$6.67-US$7.03 a share, Midea said in a filing Monday.
At the top end of the range, the IPO size would be US$3.46 billion and surpass tea shop giant Sichuan Baicha Baidao Industrial’s around US$315 million listing in April.
Midea, founded in 1968 by He Xiangjian, was the world’s largest appliance company by sales in 2023. It owns brands including Midea, Colmo and Little Swan, and acquired Japanese giant Toshiba’s home-appliance business in 2016.
The company’s first-half net profit rose 14% to 20.80 billion yuan, equivalent to around US$2.93 billion, as revenue gained 10% to 217.27 billion yuan.
Midea, whose shares are already trading on the Shenzhen Stock Exchange, has more than 35% of its Hong Kong offering covered by cornerstone investors that have committed to taking up US$1.26 billion worth of shares ahead of the listing.
Having cornerstone investors helps companies better market their shares to institutional and retail investors. Some of Media’s cornerstone investors include BYD, Boyu, Cosco Shipping and UBS Asset Management.
Morningstar analyst Jeff Zhang said Midea’s Hong Kong listing could increases its exposure to overseas investors, and expects the offering proceeds to be used on research and development efforts, manufacturing system upgrades and enhancing its distribution channels.
Hong Kong, which hosts some of the world’s biggest names and brands including Alibaba and Tencent, has seen lackluster listing activity in the past few years due to a weak Chinese economy and U.S.-China trade tensions that halted many foreign listings.
For the first half, 30 new listings in Hong Kong raised HK$13.4 billion, down 25% from the prior-year period.
Midea expects to finalize its listing price Friday and for its shares to start trading in Hong Kong starting next Tuesday. Bank of America and China International Capital Corp. are joint sponsors of the offering.
Write to Sherry Qin at sherry.qin@wsj.com
