On April 23, Hong Kong welcomed its largest initial public offering of 2024 so far, as bubble-tea maker ChaPanda debuted, raising HK$2.6 billion ($332 million). The deal size pales in comparison with previous largest offerings, being half the size of liquor company ZJLD Group’s 2023 IPO, a quarter of battery maker CALB’s 2022 listing, and a mere 20th of short-video platform Kuaishou’s 2021 debut.
In addition:
Nevertheless, the market struggled to digest the offering, with ChaPanda’s stock price plummeting 27% on the first trading day.
"There is still a huge mismatch in pricing expectations between issuers and investors," a banker involved in the deal tells Euromoney. "ChaPanda sought a price-to-earnings ratio of 15 times, but the market was only willing to pay 10 to 11 times."
This dip wasn’t entirely unexpected given the lack of cornerstone investors, which typically stabilize new listings.
According to insiders, the IPO was another non-market-oriented transaction, akin to many Hong Kong listings in the last two years. The IPO’s investor pool primarily comprised local governments and players across the company’s supply chain, including both upstream and downstream business partners.
