As 1 mainland Chinese chip IPO soars, another stumbles in busy Hong Kong week

Two mainland Chinese semiconductor firms made contrasting trading debuts in Hong Kong on Tuesday, following the issuance of HK$2.2 billion in new shares. Suzhou Denglin Technology, the week's most significant listing, experienced a steep decline of up to 8.6 percent in early trading after raising HK$1.4 billion in its IPO. The company priced its shares at HK$231, the lowest point in its offered range, and its retail tranche saw 3,809 subscribers, resulting in an oversubscription of 1.11 times. Its international offering, however, was less in demand, being just 0.34 times oversubscribed.

In stark contrast, Jiangsu Xinde Semiconductor Technology saw strong gains, opening 20 percent above its offer price and extending its advantage to as high as 42 percent in the morning. The company listed its shares at HK$8.88, slightly below the midpoint of its indicated range. The retail tranche was 8.84 times oversubscribed, while the international offering was just 0.13 times oversubscribed.

These disparate IPO outcomes come amid a broader decline in recently listed semiconductor firms in Hong Kong, with several experiencing double-digit losses since going public. Other notable examples include Shenzhen Kinwong Electronic, which has plummeted 30 percent since its debut at the end of September, and Shenzhen Longsys Electronics, which has lost 40 percent over the past two months following its HK$7 billion offering.

Beijing Eswin Computing Technology, which completed a HK$2.4 billion IPO in October, has dropped about 20 percent.

Despite these challenges, the latest listings suggest a slight resurgence in primary market activity. This week saw seven companies begin trading after raising a combined HK$6.2 billion, marking Hong Kong's busiest week for IPO debuts since a sluggish August to October period. However, demand from overseas investors remained relatively muted, with both chipmakers' international tranches only slightly oversubscribed.

Moreover, drug maker Ganzhou Hemay Pharmaceutical, originally set to debut on Monday, postponed its listing after completing its offering. In total, 31 IPOs were completed in the third quarter, the lowest figure for any of the first three quarters of the year. Fundraising also slowed significantly in October, with only three new listings, down from 12 a year earlier, according to Hong Kong Exchanges and Clearing.