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Yum China has raised more than $ 2 billion from a secondary sale of shares in Hong Kong, marking the latest “homecoming” listing of a major Chinese company listed in the United States.
On Friday, the fast food chain operator sold nearly 42 million shares at HK $ 412 ($ 53.16), according to the company, representing a discount of nearly 5 percent from the level of closing of its New York-listed shares the day before.
Total revenue of HK $ 17.3 billion ($ 2.2 billion) would be spent on expanding the company’s restaurant network and investing in “digitization,” he said.
Yum China, which operates KFC, Pizza Hut, and Taco Bell restaurants in the country, is the latest high-priced Chinese company listed in the US to sell shares in Hong Kong as Beijing-Washington relations reach. its worst condition in decades.
Some local traders and strategists were skeptical that Yum would receive as warm a reception from investors as other companies that recently carried out secondary stock placements in the city, such as NetEase, a gaming group, and online retailer JD. .com. Both have benefited from a global rally in tech stocks since their debut in June.
Yum shares in Hong Kong will begin trading next Thursday.
“It can be achieved between five and seven percent on its price in Hong Kong [on its first trading day], but more than that? I don’t think so, ”said Dickie Wong, head of research at Kingston Securities.
“If investors want to buy [Yum China]They can simply buy it in the United States, “he added. “Hong Kong Investors Focus More on ‘New Economy’ Stocks”.
Andy Maynard, trader at China Renaissance Securities, agreed that Yum might not meet the same “furore” as JD.com or NetEase, which are up 32% and 15%, respectively, since their Hong Kong listing. . He noted that there was a lot of pressure on Yum’s restaurant network in “today’s Covid environment.”
The Trump administration has proposed to force Chinese companies to withdraw from the New York Stock Exchange and Nasdaq unless US regulators have access to the working documents of the audit reports. The Senate passed legislation in May to the same effect.
That has prompted some of the largest Chinese groups listed in the US to launch backup offers in Hong Kong in case they are forced to delist. NetEase raised nearly $ 3 billion in Hong Kong, while JD.com sold nearly $ 4 billion worth of shares.
The home arrivals are a boon for the city’s financial industry and for Hong Kong Exchanges and Clearing, the dominant exchange operator, in particular. China Renaissance Securities estimates that 32 New York-listed Chinese companies with a total market capitalization of nearly $ 200 billion could be eligible for a secondary stock offering in the Asian financial hub, given their ownership and governance structures.
Tensions between the United States and China have also convinced some of the major tech companies to avoid listing in New York entirely. Ant Group, the Chinese payments company controlled by Alibaba, is expected to offer up to 15 percent of its shares in Hong Kong and Shanghai in an initial public offering that could raise $ 30 billion, making it the world’s largest IPO. .
Alibaba, which raised nearly $ 13 billion from its own stock offering in Hong Kong last year, was added to the territory’s Hang Seng benchmark index last month in a shift that investors said reflected the growing dominance of the mainland Chinese tech groups in the city.
