SHARES of Horizon Robotics jumped nearly 38 per cent early in their trading debut in Hong Kong on Thursday (Oct 24), adding to optimism over a revival in initial public offerings (IPOs) in the Asian financial hub.
The stock opened at HK$5.12, versus an issue price of HK$3.99. The US$696 million IPO of the Chinese provider of software and hardware for autonomous driving systems saw strong demand, getting priced at the top of its marketed range and attracting investors such as Baillie Gifford & Co and Norway’s sovereign wealth fund.
The firm’s strong debut is set to further boost sentiment towards Hong Kong’s IPO market after shares of bottled-water company China Resources Beverage Holdings jumped 15 per cent on listing on Wednesday. At US$8.7 billion, IPO proceeds in the city this year have already exceeded the tally for all of 2023, according to data compiled by Bloomberg.
“The participation of many well-known international investors in its IPO and its autonomous driving business that’s benchmarked against Tesla boosted market sentiment towards the company, especially following Tesla’s strong results overnight,” said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co.
Founded in 2015, Horizon Robotics is controlled by Kai Yu, an artificial intelligence scientist who used to work at Baidu and was instrumental in its push into autonomous driving. The company said it plans to use the IPO proceeds for purposes including research and development, future strategic investment into its joint ventures as well as sales and marketing.
The listing joins Asia’s busiest IPO week in more than two years, with around 20 companies from the region making deals that may raise more than US$8 billion, according to data compiled by Bloomberg. This year’s proceeds in Hong Kong got a boost from last month’s listing by Chinese appliance maker Midea Group, which raised US$4.6 billion in what was the city’s largest listing in over three years.
Chinese tech heavyweights Alibaba Group Holding and Baidu were among the four cornerstone investors that agreed to subscribe for about US$220 million in Horizon Robotics’ stock in the IPO.
Horizon Robotics’ customers include Audi, Hyundai Motor and BYD. BLOOMBERG
