The Billionaire Firms to Watch After Midea’s Hong Kong Debut

(Bloomberg) -- Hong Kong’s biggest share sale in more than three years is fueling hopes China’s dormant billionaire deal pipeline may come back to life.

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Shares of home appliance-maker Midea Group Co., which is also listed in Shenzhen, rose 17% after just two sessions in Hong Kong, following a $4 billion offering that was the largest in the city since early 2021. Its founder and largest shareholder He Xiangjian, 82, is China’s sixth-richest person, with a fortune estimated at $30.5 billion, according to the Bloomberg Billionaires Index.

While it’s far from certain the deal will revive the city’s long-suffering market for initial public offerings, which cratered over the past years on the back of China’s economic slowdown, the successful listing brings some optimism. Midea, which makes fridges and washers, ranks among China’s better-known bluechip names globally, last year announcing Manchester City striker Erling Haaland as its global brand ambassador.

“There are some potential pipeline cases to bring Hong Kong back to the top five of world IPO fund raising,” said Andy Wong, IPO leader at advisory firm SW Hong Kong. Momentum “still needs time to improve and depends on whether there are attractive issuers in the remaining few months in 2024,” he said.

Here’s a list of firms that have been weighing a Hong Kong listing, some of which are already listed in mainland China.

SF Holding

China’s largest express delivery company, founded in 1993 by billionaire Wang Wei, is waiting for approvals by the local regulator and the exchange for a share sale in Hong Kong. Last year the Shenzhen-listed firm picked banks for a second listing that was set to raise as much as $3 billion, Bloomberg News reported in May 2023. Wang grew up in Hong Kong and is worth $9.2 billion, according to the Bloomberg Billionaires Index, with the bulk of his fortune deriving from his stake in the company.

Mixue

The ice cream and tea chain company, founded in 1997 by brothers Zhang Hongchao and Zhang Hongfu in China’s Henan province, had initially filed for a Hong Kong IPO in January, but the share sale did not materialize. In 2020 it received a cash infusion from investors including the venture arm of Chinese food delivery giant Meituan. The two founding brothers had a combined net worth of $3 billion as of April, according to the Bloomberg Billionaires Index.

Sichuan Biokin Pharmaceutical

The Chengdu, China-based drugmaker, which is already listed in Shanghai, filed for a share sale in Hong Kong that may raise about $500 million, Bloomberg reported on July 11. Zhu Yi, the company’s founder and chairman, has a fortune estimated at $7 billion, according to the Bloomberg Billionaires Index.

FWD

FWD Group Holdings Ltd., the insurer controlled by billionaire Richard Li, has been considering a listing for years and may refile for an offering in Hong Kong as soon as this month, IFR reported last month. The firm had considered earlier this year options such as a potential stake sale at a valuation of more than $10 billion after plans to list in Hong Kong did not materialize. FWD was started in 2013 by Li, a Hong Kong tycoon who also runs PCCW Ltd., one of the city’s major telecom companies.

Alibaba’s Unit Cainiao

Any resumption of plans for a listing of the logistics unit of Jack Ma’s Alibaba Group Holding Ltd., would mark a turnaround for Hong Kong. It was expected to be one of the biggest listings in the city in 2024, but Cainiao Smart Logistics Network Ltd. called off the expected $1 billion-plus offering in the first quarter citing poor market conditions. At the time, Alibaba’s Chairman Joseph Tsai cited “pretty depressed” markets and a lack of liquidity to explain the decision.

Still, it may take some time for such deals to move on, according to some market players.

“Midea is a big international brand. Its Hong Kong IPO delivers more of a symbolic than commercial meaning,” said Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. “Not every billionaire family will need a Hong Kong IPO, and not every billionaire family is qualified to be part of the move to boost Hong Kong’s status as a global financial hub”

--With assistance from Venus Feng and Pui Gwen Yeung.

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