Bright Smart Securities, the biggest local broker to offer margin financing for IPOs, also received a good response but did not disclose the number.
“The performance of recent IPOs may help drum up interest in the new offerings,” said Louis Wong, executive director of Phillip Capital Management (Hong Kong). “The subscription will be higher at the end of the week as today is only the first day of the IPO.
“The offering is popular as the government and the stock exchange have been very supportive of the 18C listing regime, and they have made a lot of promotional efforts to encourage technology companies to list in Hong Kong.”
This reflects “investors’ tendency to keep up with industry hot spots such as AI and robotics and focus on specialised tech sectors,” the source said.
QuantumPharm, also known as XtalPi, is selling 187.37 million new shares at HK$5.03 to HK$6.03 each, of which 95 per cent will be set aside for global investors.
The retail portion of 9.37 million shares may be increased to 37.48 million, or 20 per cent of the total offering, depending on public demand and a so-called clawback mechanism. The final price will be set on Friday and the listing will take place on June 13.
Some brokers said local investors are still cautious about investing in IPOs.
“Under such circumstances, retail investors tend to take a wait-and-see approach to their investments. It would take time for them to understand the benefit of investing in these companies.”
QuantumPharm’s offering is looking promising on the international front too. It has already attracted eight cornerstone investors who have put in a combined HK$338 million which, if the deal is priced at the lower end of the pricing range, would represent 36 per cent of the total shares offered.
One of the cornerstones is Successful Lotus, an investment holding company owned by Hong Kong tycoon Peter Lee Ka-kit, chairman of Henderson Land Development. His firm invested HK$40 million in the IPO.
QuantumPharm counts Tencent, HongShan, China Life Insurance, Google and SoftBank Group among its investors.
“We believe our blue-chip shareholder base and prominent customer base is a testament to our capabilities and prospects,” the firm wrote in its IPO prospectus.
The company posted an adjusted net loss of 522 million yuan (US$72 million) for 2023, widening from a deficit of 437 million yuan in 2022.
According to the firm’s chief financial officer, Ronald Tam Man-hong, cash on hand exceeds 2.8 billion yuan, equivalent to US$390 million. That compared with last year’s operating costs of US$90 million.
“After the new stock is listed, cash reserves are expected to last for six years,” he said at a media briefing on Monday.