Chinese issuer targets A-to-S move
Shanghai-listed Zhejiang Haikong Nanke Huatie Digital Intelligence and Technology is aiming to become the first A-share listed company to go public in Singapore, according to people with knowledge of the matter.
The company is awaiting regulatory approval and plans to bring the US$200m share sale to the market as early as this year, said the people. DBS and Huatai International are working on the transaction.
The Chinese construction equipment leasing company is exploring an SGX listing as it plans to expand its business into South-East Asia.
“For many Chinese companies, South-East Asia is the first port of call when they want to expand overseas. In this context the listing on SGX makes sense,” a Singapore-based ECM banker said.
Haikong Nanke Huatie said in early June it was planning a Singapore listing, without giving any details. It said the move could help globalisation efforts and the establishment of artificial intelligence data centres overseas, including in South-East Asia.
SGX is expected to come up with a framework that will allow Chinese A-share companies to list there.
Currently, China comes under the developing market category, hence additional disclosures are required to list on SGX compared with companies that come from developed markets.
However, bankers are pushing for SGX to accept the disclosures these companies made in China at the time of listing.
SGX has been trying to encourage secondary listings to boost its IPO market but most have not involved any fundraising.
Hong Kong-listed pharmaceuticals company China Medical System Holding completed a secondary listing on SGX earlier this month but did not raise any capital. Its shares were up 0.3% at HK$13.34 on Friday afternoon with 5.1m shares changing hands, while in Singapore they were flat at S$2.17 with just 20,700 shares traded.
Hong Kong remains the favourite listing venue for A-share companies, with Beijing's support. Around 50 Shanghai or Shenzhen-listed companies have filed for or announced plans for a listing in the city.
A-share companies have been looking for offshore fundraising alternatives as onshore equity-raising options have largely been blocked.
Shares in Haikong Nanke Huatie fell 5% to Rmb11.95 on Friday afternoon for a market capitalisation of Rmb25bn (US$3.5bn). The stock is up 107% this year.