China Tower remains stable in Hong Kong IPO debut

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China Tower Corp Ltd, the world's largest operator of telecommunications towers, kicked off its trading debut in Hong Kong on Wednesday in the latest high-profile listing in the city.

Coming after a string of weak IPO debuts in Hong Kong, China Tower’s performance could impact upcoming listings such as Sinochem Energy. It may also weigh on the city’s attempts to sustain its record fundraising from stock floats.

Shares of China Tower were trading at 1.27 HK dollars in early trades, almost equal to the IPO price of 1.26 HK Dollars.

It priced its IPO last week at the bottom of an indicative range, raising 6.9 billion US dollars in the world’s biggest listing.

Companies have raised 22.4 billion US dollars in Hong Kong through listings this year, the city’s best ever seven-month performance, data from Thomson Reuters showed.

China Tower operates 1.9 million tower sites and had 2.8 million tenants at the end of June, its IPO prospectus showed.

The company was formed in 2014 from the tower operations of China’s three state-backed telecoms providers - China Mobile, China Telecom and China Unicom - to reduce duplication.

Its operating revenue in 2017 rose by nearly 23 percent to 68.7 billion yuan, while profit rose more than 25 times to 1.9 billion yuan. All three of its telecoms shareholders contributed almost 100 percent of its revenue last year.

China Tower Corporation Limited Chairman, Executive Director and General Manager Tong Jilu attends the debut of the company at the Hong Kong Exchanges in Hong Kong, China, August 8, 2018. /Reuters Photo

China Tower’s float is the latest move in a government push to inject new life into bloated state-owned enterprises by encouraging greater private capital investment.

Sinochem Energy, a unit of the state-owned Sinochem Group, has filed for a two billion US dollar Hong Kong IPO as the group seeks to raise capital for a shift to higher-value businesses.

Also debuting on Wednesday was the Nasdaq-listed BeiGene Ltd, the second firm to float under Hong Kong’s new biotech rules. Shares in the firm, which raised 903 million US dollars after pricing its shares at 108 HK dollars each, slipped to 107 HK dollars in early trading.

Under rules introduced earlier this year, biotech firms without revenue or profit can apply to list. Ascletis Pharma Inc, an anti-viral and cancer drugs maker, became the first to list under the new regime last week, but has seen its shares fall by 16.1 percent below their IPO price since debut day.

Source(s): Reuters