Hot on the heels of Chinese hotpot chain Haidilao’s debut yesterday, Hong Kong Exchanges and Clearing held another highly anticipated initial public offering with the debut of investment bank China Renaissance.
The company, which counts Alibaba-affiliated payments giant Ant Financial as one of its cornerstone investors, was expected to raise approximately $346 million after pricing at 31.80 Hong Kong dollars (approximately $4.07) per share.
As of 9:46 a.m. HK/SIN, China Renaissance’s stock was at 27.150 Hong Kong dollars per share, falling approximately 14.62 percent from the debut price.
Founded by Morgan Stanley and Credit Suisse alumnus Fan Bao, China Renaissance has played an advisory role in some of the biggest mergers in China’s tech ecosystem. One of those deals was the merger of Meituan and Dianping in the formation of Meituan Dianping, a tech heavyweight that saw its own public listing earlier in September.
China Renaissance also advised on the merger of Didi Dache and Kuaidi Dache for the formation of Didi Kuaidi, better known today as the Chinese ride-hailing giant Didi Chuxing.
Despite a long run of industry successes, some market observers expressed doubt over the state of China’s financial space.
“The financial market in mainland China is, well, it’s not in a very good shape for the time being,” Ronald Wan, non-executive chairman at Partners Financial Holdings, said Wednesday on CNBC’s “The Rundown.”
Challenges in liquidity and credit debt are likely to “pose a very great challenge” to companies in the space, he added.
“In that area, I think that investors should take a rather conservative approach,” Wan said. “I would take Haidilao instead of the other financial stocks.”
In an announcement of IPO allotment results posted on the China Renaissance’s website on Sept. 26, 2018, the company said that approximately 40 percent of the net proceeds from the public listing were expected to be dedicated toward expanding its investment banking business.
According to the same document, other expected applications of the net proceeds include expanding its investment management business and developing its wealth management arm.
