South-East Asian issuers flock to Hong Kong
Hong Kong’s red-hot IPO market is attracting South-East Asian issuers looking for exits amid illiquid domestic markets.
Indonesian fintech Akulaku, which had been planning a US listing, is now looking at Hong Kong and could raise US$300m–$400m through an IPO there, people with knowledge of the transaction said. The deal could come as early as this year, said one of the people.
In 2022, Akulaku was said to be considering a listing in the US through a merger with Catcha Investment Corp, a Singapore-based special purpose acquisition company, but the deal did not go through.
Travel portal Traveloka, which dropped plans in 2021 to list with Bridgetown Holdings, a special purpose acquisition company formed by billionaires Richard Li and Peter Thiel, is also weighing a proposal to list in Hong Kong through a US$500m IPO, an ECM source said. The timing of the transaction has not yet been decided. Traveloka was established in Indonesia in 2012 and moved its headquarters to Singapore in 2024.
Indonesia-listed Merdeka Gold Resources is considering a second listing of US$200m–$300m in Hong Kong as early as this year. Citic Securities, Morgan Stanley and UBS are leading the transaction.
From Thailand, food delivery, ride-hailing and e-payment service operator Line Man Wongnai is considering an overseas listing and is likely to take a final decision in a couple of months on whether the destination will be the US or Hong Kong. The company had planned a Thai IPO but political instability and a lacklustre ECM market at home have encouraged it to look abroad.
Big C Retail, which put a US$1bn Thai IPO on hold in 2023, is likely to also revisit a plan to list in Hong Kong, ECM sources said. In the past, the company management had indicated plans for a secondary listing on the Hong Kong stock exchange but no work was done on it. Thai cryptocurrency exchange Bitkub is also planning an up to US$200m Hong Kong IPO as early as this year.
Vietnam’s Vingroup-backed electric taxi operator Green and Smart Mobility is planning an international listing and the venue is likely to be Hong Kong.
“Large South-East Asian companies always looked at the US, Hong Kong and Singapore in that order to list their businesses, but now Hong Kong seems a preferred option. Valuations are eye-popping and most international and regional investors can buy an IPO there,” a Singapore-based ECM banker said.
“The buoyant IPO market has drawn global investors to Hong Kong so in theory South-East Asian companies seeking a listing here can benefit from that pool of liquidity,” a Hong Kong-based ECM banker said. “Ideally, the listings of South-East Asian companies can help draw funds that focus on investing in South-East Asian companies to the city."
China ties preferred
It is not surprising that companies from Indonesia and Thailand are looking to list overseas, given developments in those markets.
Last month, index provider MSCI pointed out that Indonesia’s stock market suffers from issues such as low free-floats and opaque ownership of companies, which can make stocks susceptible to manipulation. MSCI warned that if these issues are not addressed by May, it could downgrade Indonesia to a frontier market from emerging market status. In response, the Indonesian authorities have vowed to double the minimum free-float to 15% and promised other "bold and ambitious reforms".
Prolonged political instability has also made investor exits harder in Thailand. “In the past we used to joke that we don’t need foreigners to buy a Thai IPO as local liquidity is high. Now we have hit such a low that investors think only overseas markets can give them an exit,” a Bangkok-based ECM banker said.
Although it is dominated by listings of Chinese companies, Hong Kong has seen the occasional foreign listing over the years. According to bourse operator Hong Kong Exchanges and Clearing, 11 of the more than 400 listing applications being vetted are from foreign companies.
“It makes sense for South-East Asian commodities companies to list in Hong Kong as investors are not too concerned where the companies come from as they are buying into the outlook of commodities,” said a Hong Kong-based ECM banker.
“However, it will be more difficult for foreign companies without any China angles to list in the city, such as those that don’t see China as one of their key markets, as investors here tend to invest in companies with China ties,” said the banker.
Still the Singapore-based ECM banker said technology names such as Akulaku and Line Man will have global investor interest and they have a good chance of post-listing liquidity.
Not all foreign listings in Hong Kong have been a success. Shares in Thai coconut water drink producer IFBH have fallen 46% since the company raised HK$1.33bn (US$169.4m) in June.
French cosmetics company L'Occitane International, which listed in Hong Kong in 2010, delisted from the bourse in October 2024 because of a weak share price performance and thin trading.