CTG Duty Free dips on Hong Kong debut after bumper IPO

HONG KONG, Aug 25 (AFP): China Tourism Group (CTG) Duty Free, which raised US$2.1 billion to become Hong Kong's biggest initial public offering this year, fell slightly during its Thursday trading debut as its key market Hainan is battered by a coronavirus surge.
The world's largest travel retailer got a late start as Hong Kong's stock exchange cancelled morning trading due to a tropical storm.
When the market opened in the afternoon its stock dropped as low as HK$155.00, down from its IPO price of HK$158.00.
CTG Duty Free was a much-anticipated bright spot for the Chinese finance hub's bourse, which has been hit by a public offering drought during Beijing's ongoing corporate crackdown and disruptions from a strict zero-Covid policy curbing enthusiasm for new listings.
The retailer's debut boosted Hong Kong's new-share sales this year to US$7.2 billion, but that amount is still 80 percent below the same period last year.
CTG Duty Free's listing came as the tropical island of Hainan-a major tourist destination in China and the source of 70 percent of the company's sales-is reporting a coronavirus surge.
Cases in Hainan accounted for nearly 70 percent of China's 380 new infections on Wednesday, according to Xinhua news agency, though officials say the outbreak has reached a "turning point".
In an annual report, the company said preliminary net income for the first half of 2022 fell 27 percent year-on-year to 3.94 billion yuan (US$575 million).
The IPO's international portion was over-subscribed by 4.7 times but the portion reserved for individual investors had a lukewarm reception.
Share allocation skewed toward long-term investors and sovereign wealth funds, with the top 15 buyers taking about 70 percent of the listing, according to Bloomberg News, citing a source familiar with the matter.
Hong Kong is looking to regain its crown as one of the world's top IPO markets, even as new stock performances in recent months have been uneven.
Only 43 percent of newcomers at the Hong Kong bourse this year rose on their first day, compared to 55 percent the year before, Bloomberg News reported.
In December, CTG Duty Free held off on a potential US$5 billion Hong Kong listing as companies stayed on the sidelines during market turmoil.