(Bloomberg) -- Chinese fintech firm Linklogis Inc. rose as much as 11% on its debut in Hong Kong, with the Tencent Holdings Ltd.-backed company poised to snap a recent run of disappointing listings in the city.
Its shares pared the gain to 8.1% as of 11:29 a.m. local time. Linklogis priced its $1.02 billion initial public offering near the midpoint of an indicative range at HK$17.58 per share, while the retail portion of its offering was 98.5 times subscribed by local investors.
Its performance comes after a run of underwhelming listings in Hong Kong. Fintech firm Bairong Inc. slumped 16% during its first day of trading last week, delivering the worst debut in three years, while video streaming service Bilibili Inc. also fell. It is the second IPO deal exceeding $1 billion launched in Hong Kong this year after Kuaishou Technology, which soared 161% on its debut in February.
However, while Linklogis’ midpoint-pricing and ties to Tencent made it attractive, institutional demand was not particularly strong, said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. “We are still in cherry-picking season where people are cautious about buying names without powerful cornerstone investors or solid businesses.”
The Shenzhen-based firm offers digital services to help facilitate supply chain finance transactions in China. While its prospectus shows the company hasn’t made a profit in the last three years, revenue expanded 47% last year following an 83% surge in 2019.
Chinese fintech companies are going through a particularly hard year after Beijing suddenly halted Ant Group Co.’s IPO last year, signaling wider crackdowns for the sector. Regulators are inspecting businesses spanning from online lending to payments and insurance tech, making investors wary when it comes to backing firms in the industry.
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