Midea’s Hong Kong IPO Sparks Optimism for China’s Billionaire Firms Eyeing Listings

Hong Kong’s recent $4 billion IPO from home appliance giant Midea Group Co. has reignited hopes for a revival of the city’s stagnant initial public offering (IPO) market. As the largest share sale in more than three years, Midea’s successful debut may signal a turnaround for China’s billionaire-backed companies looking to enter the Hong Kong stock exchange.

Midea Group: A Resounding Success

After just two trading sessions, Midea’s shares surged 17%, reflecting strong investor interest and confidence. Founded by billionaire He Xiangjian, who ranks as China’s sixth-richest person with an estimated fortune of $30.5 billion, Midea is already listed in Shenzhen and is known for its diverse range of home appliances, including refrigerators and washing machines. The company has even partnered with global sports icons, appointing Manchester City striker Erling Haaland as its brand ambassador.

A Renewed Focus on Hong Kong IPOs

While Midea’s listing does not guarantee a revival of Hong Kong’s IPO landscape, it does instill a sense of optimism among investors and market analysts. Andy Wong, IPO leader at advisory firm SW Hong Kong, noted that several potential listings could push Hong Kong back into the top tier of global fundraising. However, he emphasized that this momentum would depend on identifying attractive issuers in the coming months.

Firms to Watch for Upcoming IPOs

Several high-profile companies are currently considering or preparing for listings in Hong Kong, showcasing the potential for a bustling IPO market:

SF Holding

China’s largest express delivery service, SF Holding, founded in 1993 by billionaire Wang Wei, is awaiting regulatory approval for its Hong Kong share sale. The Shenzhen-listed firm aims to raise up to $3 billion through its second listing. Wang, who has deep ties to Hong Kong, boasts a net worth of $9.2 billion.

Mixue

Known for its ice cream and tea offerings, Mixue was established in 1997 by brothers Zhang Hongchao and Zhang Hongfu. Although the company initially filed for a Hong Kong IPO in January 2023, the sale did not proceed. Despite this setback, Mixue received a significant investment from Meituan’s venture arm in 2020. As of April 2023, the Zhang brothers held a combined net worth of $3 billion.

Conclusion

Midea Group’s successful IPO marks a potential turning point for Hong Kong’s long-suffering IPO market, raising hopes that other billionaire-backed firms may follow suit. As companies like SF Holding and Mixue prepare for their own listings, the landscape may shift significantly, offering new opportunities for investors and revitalizing the market.