TOKYO--(BUSINESS WIRE)--Finance executives at Tokyo-based wealth management company Akita Michinoku Capital have said Yum China will price its secondary listing in Hong Kong at a slight discount to its share price in the U.S., putting the fast food-chain operator on target to raise over $2 billion.
Head of Corporate Trading at Akita Michinoku Capital, Martin Thornton, said “Yum China is set to price its offering at HK$412 ($53.16) per share, which puts it on course to raise nearly HK$17.3 ($2.2 billion) from the sale of almost 42 million shares, nearly 5% discount to its U.S. stock at closing on Thursday.”
Yum China, which operates KFC, Pizza Hut and Taco Bell restaurants in China, is the latest Chinese "homecoming" company with a listing in the US now pricing shares in Hong Kong, as the Beijing-Washington conflict reaches its worst state in decades.
The Trump administration has proposed that Chinese companies will be forced to delist from the New York Stock Exchange and Nasdaq unless American regulators are granted access to the documentation from audit reports after the Senate passed legislation to the same effect in May.
This has prompted some of the largest Chinese groups listed in the U.S. to launch back-up listings in Hong Kong in the event they are forced to delist. So far this year, gaming group NetEase raised almost $3 billion through its Hong Kong listing, while online retail giant JD.com managed to raise nearly $4 billion.
"The 'homecoming' companies are a significant boost for the Hong Kong financial sector, with an estimated 32 Chinese companies which total a market capitalisation of around $200 billion being qualifying for a secondary share offering in the financial hub of Asia," said Oliver Wright, Director of Corporate Equities at Akita Michinoku Capital.
The tensions between the U.S. and China have also convinced several major tech companies to avoid listing in New York altogether. Ant Group, the Chinese payments firm owned by Alibaba, is set to offer up to 15 per cent of its shares in Hong Kong and Shanghai in an initial public offering which could raise a record $30 billion, making it the world’s largest IPO.
Last year, Alibaba raised nearly $13 billion through its own share offering in Hong Kong and was added to the benchmark Hang Seng index last month in a move investors said demonstrated the increasing dominance of mainland Chinese tech groups in the city, according to data collected by Akita Michinoku Capital.
About Akita Michinoku Capital
Established in 2009, Akita Michinoku Capital is a respected wealth management company with a global network reaching over 40+ countries. By uniting financial markets from East to West, we can support our clients through all facets of wealth management and provide our clients with the best possible investment performance through a broad range of investment products.