Dongshan Precision falls 2.1 per cent in Hong Kong debut after HK$9.88bn IPO
Chinese printed circuit board maker Suzhou Dongshan Precision Manufacturing dropped 2.1 per cent on its first trading day in Hong Kong after raising HK$9.88 billion in its share sale. The weak debut follows a global tech rout and comes as other firms delay listings, with analysts citing waning enthu
Chinese printed circuit board maker Suzhou Dongshan Precision Manufacturing (2384) dropped 2.1 per cent in its Hong Kong trading debut on Wednesday, after raising HK$9.88 billion in its share sale.
The stock opened at HK$82.40 compared with its HK$86.80 offer price, before climbing to HK$85, or about 2.1 per cent lower. Hong Kong's Hang Seng Index was up 0.25 per cent, while the Hang Seng Tech Index was up 1.22 per cent.
"The new listing environment has been quite mediocre lately. So a weak debut for Dongshan would not surprise me," said Dickie Wong, executive director of research at uSMART Securities. "While interest in names like Anthropic remains strong in the US, the AI supply-chain theme here has already passed its most enthusiastic phase and investors have become more selective."
Dongshan's debut follows a global tech rout driven by fresh concerns about how long the AI spending boom can last and whether the returns will justify the heavy borrowing in the sector. The firm pushed ahead with the listing after Chinese robot maker Changzhou Microintelligence (3275) and tourism group Jiangsu Slender West Lake Culture and Tourism (6157) delayed their planned Hong Kong share sales, citing market conditions.
Dongshan set its offer price at HK$86.80 per share, about 7.5 per cent below its HK$93.80 maximum price, according to a stock exchange filing on Sunday. The company did not use its option to increase the deal size, the filing showed. Hong Kong retail investors subscribed for 0.52 times the shares initially set aside for them, while the international offering was 3.17 times subscribed, according to the company's allotment results filing on Tuesday. Dongshan moved 5.47 million shares from the Hong Kong retail tranche to the international offering, the filing showed.
The deal's cornerstone investors, or large investors that commit to buy shares before a listing, were allocated 56.89 million shares, equal to 50 per cent of the offer, according to the filing. They included Aurora SF, JPMorgan Asset Management (Asia Pacific), Alibaba Investment and CPE Bodhi. The cornerstone shares cannot be sold for six months, the filing showed.
Dongshan makes printed circuit boards, automotive parts, display modules and optical transceivers, which send data through fibre-optic cables, according to its listing prospectus. Dongshan plans to use most of the listing proceeds to expand production of high-speed optical chips, optical modules and high-end circuit boards, the prospectus showed.