Midea shares rise 4.9% in Hong Kong grey-market trading

CHINESE appliance maker Midea Group’s shares gained as much as 4.9 per cent in grey-market trading ahead of their Tuesday (Sep 17) debut in Hong Kong. 

The shares traded as high as HK$57.50 on an over-the-counter retail platform operated by Phillip Securities Group. They were priced at HK$54.80 apiece.

Companies can sell shares in the grey market one day before officially listing them on the stock exchange.

China-based Midea raised US$4 billion in an enlarged deal that was priced at the top of the marketed range.

Its Shenzhen-listed stock has climbed about 16 per cent this year against a decline of about 8 per cent in the CSI 300 Index – a benchmark of onshore Chinese equities.

A successful debut by Midea is seen having the potential to bolster investor confidence towards Hong Kong’s initial public offering market, where issuance has plunged in recent years amid China’s economic and regulatory struggles.

Midea’s listing at US$4 billion will be the market’s biggest debut since Kuaishou Technology’s US$6.2 billion listing in early 2021.

Founded in 1968, the company sells air-conditioners, washing machines, lifts and other products. Its brands include Comfee, Eureka and Little Swan.

China’s largest appliance manufacturer plans to use some of the proceeds to expand its global distribution channels and sales network to boost overseas sales.

This is in line with the broader push by Chinese businesses to expand abroad as local competition intensifies and consumption wanes. BLOOMBERG