AsianFin -- Shares of Chery Automobile jumped 11.2% on Thursday as the Chinese carmaker made a strong trading debut on the Hong Kong Stock Exchange (HKEX) following its $1.2 billion initial public offering (IPO) — the city’s second-largest listing so far this year.
The stock opened at HK$34.20, well above the offer price of HK$30.75, as the benchmark Hang Seng Index edged up just 0.1%, signaling strong investor demand despite volatile global market conditions.
Chery, best known for its Chery, Jetour and iCAR brands, is looking to raise capital to expand its presence in the highly competitive electric vehicle (EV) and smart car market, where it faces both local giants such as BYD and global players like Tesla.
Last week, Chery sold 297.4 million shares at the top of the marketed price range of HK$27.75 to HK$30.75, giving the company a market valuation of nearly $23 billion.
According to company filings, the IPO was met with overwhelming demand. The institutional tranche was oversubscribed 11.6 times, while the retail portion was 308 times covered, underscoring robust appetite from both large investors and individual buyers.
Cornerstone investors committed $587 million, nearly half of the offering, according to Chery’s prospectus. Among them, China’s Enterprise Mixed-Ownership Reform Fund, a state-owned investment vehicle, took about $190 millionworth of shares, while Hillhouse, a leading private equity firm, subscribed for $60 million.
Chery said it plans to allocate 35% of the IPO proceeds toward research and development (R&D) for passenger vehicles across multiple models and to further broaden its product portfolio.
Another 25% will go toward developing next-generation vehicles within the next three years, a move aimed at strengthening its competitiveness as the industry shifts toward electrification, connectivity, and autonomous driving technologies.
The automaker has already gained traction in both the domestic and overseas markets, particularly in emerging economies where its vehicles have been popular for their affordability. With fresh funding, Chery is positioning itself to compete more aggressively in higher-end EV and smart vehicle segments.
Chery’s debut adds momentum to Hong Kong’s IPO market, which has been gradually recovering after a prolonged slowdown due to global economic uncertainty and geopolitical tensions.
The listing comes just days before another major flotation — Zijin Gold International, which is currently raising $3.2 billion. Its shares are set to start trading on Tuesday, in what will be Hong Kong’s largest IPO in four years.
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