As 1 mainland Chinese chip IPO soars, another stumbles in busy Hong Kong week

Two mainland Chinese chip suppliers made sharply divergent trading debuts in Hong Kong on Tuesday after raising a combined HK$2.2 billion (US$280 million), underscoring investors’ selective appetite for semiconductor stocks despite a pickup in new listings.

Suzhou Denglin Technology, the week’s largest listing, fell by as much as 8.6 per cent in morning trade after raising HK$1.4 billion in its initial public offering (IPO).

The graphics processing unit maker priced its shares at HK$231 – the bottom of its marketed range. Its retail tranche drew 3,809 subscribers and was 1.11 times oversubscribed, while the international offering was 0.34 times oversubscribed.

By contrast, Jiangsu Xinde Semiconductor Technology posted strong gains, opening 20 per cent above its offer price before extending its advance to as much as 42 per cent in the morning.

The chip-packaging and testing firm priced its shares at HK$8.88, slightly below the midpoint of its indicated range. Its retail tranche was 8.84 times oversubscribed, while its international offering was 0.13 times oversubscribed.

The contrasting debuts come amid a broader slump among recently listed semiconductor firms in Hong Kong, with several suffering double-digit declines since going public.

Printed circuit-board maker Shenzhen Kinwong Electronic has dropped 30 per cent since its late-September debut, while Shenzhen Longsys Electronics, which raised HK$7 billion, has stumbled 40 per cent over the past two months. Beijing Eswin Computing Technology, which completed a HK$2.4 billion offering in October, has fallen about 20 per cent.

The latest listings nevertheless point to a modest revival in primary market activity. Seven companies began trading this week after raising a combined HK$6.2 billion, making it Hong Kong’s busiest week for IPO debuts since a sluggish August-to-October period.

However, overseas demand remained muted, with both chipmakers’ international tranches only slightly oversubscribed.

Drug maker Ganzhou Hemay Pharmaceutical, originally scheduled to debut on Monday, postponed its listing after completing its offering.

Companies completed 31 IPOs in the third quarter, the fewest for any of the first three quarters this year. Fundraising also slowed sharply in October, with only three new listings, down from 12 a year earlier, according to bourse operator Hong Kong Exchanges and Clearing.