Autohome shares debut higher, caution around Chinese tech stocks caps gains
By Scott Murdoch and Donny Kwok
HONG KONG (Reuters) - Autohome shares are trading just 2% above the company's issue price after making their debut on the Hong Kong Stock Exchange on Monday, as investors become increasingly wary of mainland Chinese technology shares.
The online vehicle firm had raised $688 million through its Hong Kong secondary listing by pricing its shares at HK$176.3 each. The stock is at $HK180 heading into the afternoon session.
The Hang Seng Index rose 0.6% and Hang Seng Tech index gained 1.1% in early trade on Monday.
Autohome had expected to raise up to $983 million in Hong Kong when the deal was initially launched.
But the final pricing of the shares came after its U.S. stock dropped by 12.5% last Monday amid a rout of global tech shares on financial markets.
Autohome began trading for the first time with a 2.7% gain Monday but the increase was tepid compared with some recent Hong Kong debuts.
New Horizon Health's stock had surged 200% when it debuted on Feb. 17 after its $263 million IPO.
Autohome's softer opening, in comparison to some recent first day performances, was attributed to concerns over the future earnings growth of tech stocks facing potentially greater scrutiny in mainland China.
The Hang Seng Tech Index is down 0.45% so far this year, as compared to 78.7% hike in 2020.
"The overall poor performance of technology stocks listed in Hong Kong recently is related to the market's worries about the tightening of mainland regulations, including anti-monopoly policies," Everbright Sun Hung Kai analyst Kenny Ng told Reuters, adding that negative sentiment had hit Autohome.
Autohome's U.S.-listed stock is down 34% from its recent peak on Feb. 16 and the price set for the Hong Kong listing was a 5.5% discount to the U.S. closing price last Monday.
Institutional investors' appetite for Autohome's Hong Kong listing was weaker than previous deals, with the tranche covered just four times, compared to multiple times for recent popular deals.
"Add to that the recent tech volatility and it's definitely not going to be one of the best secondary listing debuts," said Aequitas Research director Sumeet Singh, who publishes on Smartkama.
(Reporting by Donny Kwok and Scott Murdoch; Editing by Tom Hogue and Uttaresh.V)
