Tencent Investors Cheer Hong Kong's Second-Largest IPO For 2023

Tencent Holdings Limited TCEHY-backed J&T Global Express breathed life back into Hong Kong’s flagging IPO market with an oversubscribed market debut Friday.

The company offered 327 million shares at HK$12 a share and received 1.4 times the number of orders for its stock, including a 1.9 times oversubscription from offshore share purchasers, it said in a stock exchange filing.

J&T raised $520 million from the offering and has options to raise an additional HK$567 million ($72.5 million) from the oversubscriptions, which it has not yet exercised.

The shares held steady during Hong Long morning trading at HK$11.80 to HK$12.02 per share on volumes of HK$185 million.

Shares in Tencent were up 1.8% in Hong Kong trading as investors applauded the company’s cornerstone stake in the debut of Hong Kong’s second-largest IPO this year.

J&T Express is South East Asia’s largest global logistics company in terms of total parcel volume of which it maintains a 22.5% share, according to a report by Frost & Sullivan. J&T entered the Chinese market in 2020.

J&T was established in 2015 by two Chinese entrepreneurs, one of whom, Tony Chen Minyong, is the founder and chief executive of smartphone maker Oppo.  

Investors in J&T’s IPO include Tencent as the company’s largest cornerstone backer along with Sequoia Capital, Singapore’s sovereign fund Temasek and a variety of other China tech companies.

The debut of J&T caused some excitement on the island which has had a poor turn-out for its new listings market so far over the past 9 months. The Hong Kong IPO market has had its weakest turnout in 14 years this year, boasting just one other major market debut in 2023, which is potentially scheduled for later in the fourth quarter. Cainiao Network Technology Co, a spin-off of Alibaba Group Holdings Limited BABA is planning to file for a $1 billion IPO in Hong Kong soon, according to reports.