China’s Tuhu Car shares unchanged from issue price in Hong Kong debut

By Scott Murdoch and Donny Kwok

SYDNEY (Reuters) -Tuhu Car’s shares opened unchanged from their HK$28 ($3.58) issue price as the Chinese car maintenance firm started trading on the Hong Kong Stock Exchange on Tuesday.

The company raised $152 million in its initial public offering by pricing its shares at the low end of the range flagged to investors last week.

The firm sold 42.44 million shares in the IPO after an adjustment option was exercised to increase the size of the deal from its original 40.61 million shares.

Tuhu set the price of its shares at the low end of the HK$28 to HK$31 range that was flagged to investors when the deal was launched.

It was the first of three IPOs last week to price at the low end of the range, followed by AI startup Beijing Fourth Paradigm and hospital cloud software firm Neusoft Xikang, indicating demand for new share sales remains weak.

The international tranche of Tuhu’s IPO was 2.3 times oversubscribed, the company said on Monday, while retail demand was 2.67 times the number of shares on offer.

Those oversubscription rates are considered low compared to Hong Kong’s IPOs which could be more than 1,000 times covered by the city’s army of retail investors keen to cash in on quick returns.

There has been less than $3 billion worth of IPOs in Hong Kong in the first nine months of 2023, according to London Stock Exchange Group data, compared to $4 billion at the same time last year.

Higher global interest rates and tough new rules put in place by Chinese authorities on their companies wanting to list on overseas exchanges has been blamed by analysts for the persistently weak IPO market in Hong Kong.

($1 = 7.8187 Hong Kong dollars)

(Reporting by Scott Murdoch in Sydney and Donny Kwok in Hong Kong; Editing by Tom Hogue and Muralikumar Anantharaman)