,Citigroup Inc has won eight Chinese healthcare mandates in the three weeks just before Lunar New Year, expecting to raise US$300mil to US$400mil for each in July through September. (File pic shows the CITI Bank HQ in New York) HONG KONG: Hong Kong’s bankers are working around the clock as the region’s companies rush to go public. Initial public offerings (IPOs) in the city have already hit almost US$11bil (RM45.3bil), a close to 500% jump from a year earlier, with video streaming platform Bilibili Inc and search giant Baidu Inc among companies preparing multi-billion dollar deals. Digital roadshows and clients eager to move faster to capture abundant liquidity – especially as market sentiment has begun to sour – means bankers are keeping dawn-to-midnight schedules, say some, even turning down deals where they’re relegated to junior roles. Companies are trying to “get the deal done as soon as they can, ” said Stephanie Tang, head of private equity for greater China at Hogan Lovells. “Many of them see this as an opportunity and if they are not catching the train quickly, they might lose the opportunity.” A pandemic-induced hunger for technology stocks and the threat of US delistings have been a boon for the financial hub during a difficult political stretch, driving a surge in initial and secondary share sales. A new push by Shanghai’s Nasdaq-like Star board to more closely scrutinise IPOs along with a pile-up of applications there may drive more of China’s unicorns to Hong Kong, taking listings to a record, Bloomberg Intelligence estimates. Unsurprisingly, the health sector is the busiest, with deals poised for both Hong Kong and the US Goldman Sachs Group Inc’s healthcare team is working on at least 20 IPOs in the US$300mil to US$1bil range. Citigroup Inc has won eight Chinese healthcare mandates in the three weeks just before Lunar New Year, expecting to raise US$300mil to US$400mil for each in July through September. Citi has also nabbed the WeDoctor IPO, which is seeking to raise as much as US$3bil at a pre-IPO valuation of US$12bil. The details were shared by bankers and executives familiar with the deals, who asked not to be named discussing private matters. Representatives for Goldman Sachs and Citi declined to comment on the deals. WeDoctor also declined to comment. “It’s busier than ever, ” said Udhay Furtado, Citi’s co-head of Asia Equity Capital Markets. “This is an attractive window for issuers and liquidity is available across financing products.” But the bustle comes loaded with execution risk as Chinese markets in early February started to stumble after a two-year rally and what’s looking like the biggest-ever quarter for initial public offerings fuelled by a US-led boom in blank-check listings. In one recent deal, Autohome Inc, a Chinese online car-sales website, sold shares in the city at about a 5.5% discount to its last price in New York. Given the current volatility in the markets, only the most straightforward deals are also being pushed ahead right now, according to a banker in Hong Kong. Many companies pushing to sell shares have yet to establish a sustainable way to make profits, including Chinese grocery delivery apps such as Meicai and Dingdong Maicai, who are facing heavy cash burn to win market share. Liao Ming, the founder of Prospect Avenue Capital, which oversees US$500mil in private equity assets, said he expects at least five of his portfolio companies to list this year, out of a total 12. “A lot of these companies including the grocery space, wouldn’t be able to find investors in a normal year, ” said the Beijing-based former Morgan Stanley banker. “But because of the bullish sentiment this year, a lot of companies that aren’t ready yet are rushing to get out the door.” — Bloomberg
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