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Dealmaker for tech stars China Renaissance plummets after IPO
[HONG KONG] China Renaissance Holdings Ltd, the boutique investment bank that's worked with many of the country's top startups, plunged in its Hong Kong trading debut in the latest example of a high-profile initial public offering that failed to resonate with investors.
The firm raised US$345 million in the IPO at the bottom of a marketed range, according to data compiled by Bloomberg. It saw weak demand from retail investors, drawing orders for just 0.82 times the amount of stock initially available to them. The portion of the sale reserved for institutional investors was "moderately oversubscribed", the company said in an exchange filing on Wednesday.
"We can't predict what will happen near term," chief executive officer Bao Fan said in an interview with Bloomberg Television on Thursday, citing market volatility. "We're very confident about our business performance in the future, so in the end, I'm pretty sure our business fundamentals will prevail."
The former Morgan Stanley banker, who founded China Renaissance in 2005, said most IPO proceeds will be invested in the wealth and investment management business.
China Renaissance's shares were trading down 15.2 per cent as of 10.56am in Hong Kong. The Hang Seng Index was up 0.1 per cent. The firm is an early investor in a number of Chinese technology companies including restaurant review and delivery giant Meituan Dianping.