China's Zhihu shares slump nearly 24% in Hong Kong debut
By Scott Murdoch and Donny Kwok
(Reuters) -Question and answer website Zhihu Inc's shares ended down 23.6% on Friday in Hong Kong, making it one of the worst ever secondary listing debuts in the city.
The Chinese company, which provides services similar to Quora Inc, raised $106 million by pricing its shares at HK$32.06 a piece in its dual primary listing. Zhihu is also listed in New York.
Zhihu's shares were under pressure from the start of trading after the U.S. Securities and Exchange Commission on Thursday added the company and another 16 firms to the list of stocks potentially facing delisting in the United States for not giving access to their audited accounts.
The stock closed at HK$24.50 after hitting a low at HK$23.45, with 4.06 million shares worth HK$100.9 million ($12.86 million) changing hands.
The fall was the second largest ever decline for a secondary listing in Hong Kong, based on Dealogic data. The biggest was Ganfeng Lithium Co when it dropped 29% on its first day in October 2018.
The company's share price fall outpaced broader weakness in the benchmark Hang Seng Index, which eased 0.2%, and compared with a 0.3% gain in the Hang Seng Tech Index.
Zhihu sold 26 million secondary shares in the deal to become the latest U.S.-listed Chinese company to press ahead with a listing closer to its home market.
Zhihu's New York-listed shares were up 0.6% on Thursday but remain down 70% so far in 2022.
Two of the company's listed depository receipts equal one Hong Kong share, based on its regulatory filings for the listing.
Zhihu's Hong Kong listing comes as an increasing number of U.S.-listed Chinese firms are going public in Hong Kong, as the regulatory stand off between Beijing and Washington over U.S. access to Chinese companies' audited accounts shows no signs of ending.
($1 = 7.8447 Hong Kong dollars)
(Reporting by Scott Murdoch and Donny Kwok; Editing by Shri Navaratnam, Muralikumar Anantharaman and Jane Merriman)
