APT Electronics IPO: Hong Kong Markets Experience High Demand from Retail Investors

APT Electronics' Impressive Debut

APT Electronics, a Chinese lighting devices supplier, jumped 16% in Hong Kong after its initial public offering (IPO) recorded the second-highest subscription on record from local retail investors. The shares began trading at HK$4.20 versus the IPO price of HK$3.61, under stock code 2551, and recently traded as high as HK$4.48, valuing the company at HK$2.4 billion (US$309.8 million).

Market Trends Influenced by APT IPO

The Hang Seng Index rallied 1%, and the Tech Index advanced 2.3%, spurred by the outlook of rate cuts. The Hong Kong Monetary Authority on Friday cut its base rate for a second time this year, aligning with the Federal Reserve’s overnight policy easing move. Geely Auto, a key customer of APT Electronics, is a strategic investor, with its founder Li Shufu also holding a minority stake.

Retail Investor Frenzy

Demand from retail investors reached an astonishing 5,678 times the shares on offer, leading IPO managers to boost the allocation to 19.32 million shares from 3.36 million. Previous records show Kwai Chung’s IPO in 2018 holds the city’s subscription record with 6,289 times.

Financial Backing and Future Plans

Citic Securities acted as the sole sponsor and overall coordinator of the IPO, with GF Securities and Sinolink Securities as joint coordinators. APT Electronics, based in Guangzhou, raised HK$139.5 million from the sale of 38.6 million shares, primarily to enhance its production capacity. The company’s focus lies on intelligent automotive vision, high-end lighting, and advanced displays.

Financial Performance Overview

APT Electronics reported 843 million yuan in sales for the year to May 31, with earnings rising 35% to 32.2 million yuan from a year earlier. Most sales were derived from automotive lamps and automotive-grade LED devices and modules.