Chinese companies are stepping up their fundraising activities to shore up liquidity and manage refinancing needs as market sentiment shows signs of recovery in the second half of the year.
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On Thursday, artificial intelligence firm SenseTime unveiled an agreement to raise HK$2.5 billion (US$318 million) through a share subscription, and dairy giant Mengniu Dairy said it would generate 3.5 billion yuan (US$489 million) through a bond issuance. Those plans came to light a day after UBTech Robotics divulged a HK$2.4 billion share placement plan.
The financing moves come amid strong momentum in Hong Kong’s equity market. Initial public offerings in the city surged 695 per cent year on year in the first half to US$14.1 billion, making it the world’s largest IPO market during the period, according to a report released by bourse operator Hong Kong Exchanges and Clearing (HKEX) on Wednesday.
“Investor sentiment has improved markedly,” despite complicated geopolitical tensions, HKEX said, noting that both international institutions and retail investors had shown strong demand for new offerings. Equity fundraising was particularly active in the consumer sector and the technology, media and telecommunications sector, with firms in AI, healthcare and fast-moving consumer goods raising substantial capital to fuel expansion, it said.
SenseTime said its conditional subscription agreement with unnamed investors would involve 1.67 billion new shares priced at HK$1.50 apiece, representing a 6.25 per cent discount to its last closing price. The proceeds were expected to support the firm’s business development and general corporate use, including ongoing investment in AI infrastructure and research into generative models, as well as new areas such as robotics and digital finance, it said.
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Mengniu, one of China’s largest dairy producers, said it would issue two tranches of yuan-denominated bonds: a 2 billion yuan bond maturing in 2030 with a 2 per cent coupon, and a 1.5 billion yuan bond maturing in 2035 with a 2.3 per cent coupon. The company said the proceeds would be used for refinancing existing debt, with an equivalent amount to be allocated to eligible green and social-responsibility projects under its sustainable-financing framework.