Chinese spirit maker ZJLD slumps 17% in Hong Kong debut

CHINESE spirit maker ZJLD Group’s shares opened 17 per cent lower in their trading debut on Thursday (Apr 27), after it completed the largest new share sale in Hong Kong this year.

Before the disappointing trading, dealmakers had hoped that a positive performance by ZJLD could prompt more initial public offerings (IPOs) in the second half of 2023 after a weak start to the year.

The KKR-backed company raised US$675.2 million last week in the biggest new share sale in Hong Kong since CALB Group raised US$1.3 billion in October.

ZJLD shares opened at HK$9 compared to the issue price of HK$10.82 each. Hong Kong’s Hang Seng Index was down 0.1 per cent in early trade.

The IPO price was at the lower end of the HK$10.78 to HK$12.98 per share range indicated to investors when the deal was launched.

ZJLD produces baijiu, the clear distilled spirit popular across China. The drink is considered China’s national liquor and is the world’s most consumed liquor, according to ZJLD’s prospectus.

MedSci Healthcare Holdings shares dropped 1.1 per cent on Thursday when its shares also debuted in Hong Kong after it raised US$77 million last week.

There was just US$508.3 million worth of new share sales in Hong Kong in the first quarter, according to Refinitiv data, down from US$1.2 billion in the same period last year.

Financial market volatility driven by rising interest rates, Credit Suisse’s shotgun merger with UBS and a US banking crisis has kept new deal issuance volume low globally this year.

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Institutional investors subscribed for 3.9 times the amount of ZJLD shares on offer in that tranche, according to the firm’s filings, which was above many other Hong Kong IPOs this year. REUTERS