UBTech makes steady debut after pricing Hong Kong IPO at lower end of target

UBTech Robotics, China’s biggest manufacturer of educational and humanoid robots, climbed on the first day of trading in Hong Kong, after raising HK$1 billion (US$130 million) of proceeds in the city’s final initial public offering (IPO) of the year.

The stock gained 0.3 per cent to HK$90.30 at 10am local time on Friday, versus its IPO price of HK$90, giving the Shenzhen-based company trading under 9880 code a HK$37.7 billion market capitalisation. The Hang Seng Index advanced 0.2 per cent, after surging to a four-week high on Thursday.

“Since the founding of the company, UBTech always keeps in mind the mission of having robots in every household,” Zhou said at the listing event. “After the IPO, the company will continue to deliver its promise [and] deepen its research on robotics”

The debut lit some sparks in a gloomy year for Hong Kong’s stock market. As of December 15, the number of IPOs had fallen by about a third to 64, while proceeds collected from investors declined 65 per cent to a 20-year low of HK$41 billion, according to stock exchange statistics.

More than US$600 billion of market value has evaporated across the Hong Kong stock exchange this year, according to Bloomberg data. The Hang Seng Index tumbled 17 per cent in an unprecedented four-year losing streak. Its top three losers, Li Ning, Country Garden Services and Zhongsheng Group, plunged by 53 per cent to 69 per cent as of December 28.

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UBTech sold 11.3 million new shares to investors in Hong Kong and globally, pricing the offering at the lower end of its target range of HK$86 to HK$116, according to a stock exchange filing on Thursday. The IPO generated 5.2 times from Hong Kong investors and 2.2 times from global funds.

China’s service robot market is forecast to grow at an annual compound rate of 24 per cent to 183.2 billion yuan (US$25.6 billion) by 2028, outpacing the 18 per cent growth rate globally, according to a report by Frost & Sullivan published in the IPO prospectus.

Guotai Junan Securities was the sole sponsor and global coordinator of the IPO. Citic Securities, CMBC Capital, Huatai Securities, BNP Paribas and Shenwan Hongyuan also joined as global coordinators.

Additional reporting by Li Jiaxing