Yixin jumps on debut as tech fever grips Hong Kong market

[HONG KONG] - Yixin Group Ltd, an online car-loan provider backed by Tencent Holdings, jumped as much as 32 per cent on its first day of trading, marking the latest eye-popping debut in a Hong Kong stock market gripped by technology fever.

The company's HK$6.8 billion (S$1.18 billion) initial public offering was sold at the top end of the marketed range, in a sale that drew massive interest from retail investors. The stock was trading 11 percent higher on Thursday as of 10:54am local time.

Yixin is the latest stock with links to Tencent to debut: China Literature Ltd., Tencent's online reading arm, soared 86 per cent in its first day last week, as more than 5 per cent of Hong Kong's population applied for shares in the company. Fundraising from tech-related IPOs this year has already hit a record, bouncing back from the loss of Alibaba Group Holding's 2014 listing, which cast doubt on the Asian hub's ability to lure Internet offerings.

"We're backed by Tencent in many different facets: accounts, user traffic, risk management, telematics," Yixin chief executive officer Andy Zhang said in an interview with Bloomberg Television.

When asked how much the link to the payments giant mattered to the first-day performance, Zhang said: "The pop that we're getting is really from the fundamentals of my businesses, rather than only on the stock market side of it."

His company's shares rose as high as HK$10.18 before recently trading at HK$8.48, compared with its IPO price of HK$7.70.

The retail portion of Yixin's IPO was about 561 times subscribed, while the institutional portion was "very significantly" oversubscribed, the company, a unit of Bitauto Holdings Ltd., said in a statement.

Tech-related initial public offerings in the city, including Yixin and ZhongAn Online P&C Insurance Co, have raised more than US$4 billion this year, according to data compiled by Bloomberg, a new record. That's more than five times the amount raised in Hong Kong during the global dot-com boom in 2000.

Founded in 2014, Yixin provides online car loans and insurance, as well as vehicle leasing. Before the IPO, it had raised a combined 10 billion yuan in three rounds of funding from investors including Tencent, JD.com Inc. and Baidu, according to its IPO prospectus. Tencent subsidiaries will own more than a fifth of the company after the offering, according to the document.

Yixin is integrating its account systems with Tencent's Tenpay, which would allow customers to obtain loans or leases on cars using the online payments platform, Zhang said. The company is looking to expand its 500,000-vehicle fleet by "another million or more," he said.

BLOOMBERG