Lingyi iTech Seeks $1.06 Billion in Hong Kong Listing at 44% Discount

Q: Why is a humanoid robot leader offering its Hong Kong shares at a steep 44% discount?

It is likely pricing the Hong Kong sale at a deep discount because that is what the A/H-share market and current IPO conditions demand, not necessarily because the business has suddenly weakened. For mainland companies already listed in Shenzhen or Shanghai, Hong Kong shares often trade well below their onshore A-shares. The searched market data shows many dual-listed Chinese companies trading at 40%-plus H-share discounts, so Lingyi iTech’s 44% gap is large but not unusual in that market structure. Hong Kong and mainland shares have different investor bases, liquidity profiles, and valuation norms, and capital controls still limit full arbitrage between the two. The company also appears to be trying to ensure a smooth deal in a crowded Hong Kong pipeline. Hong Kong’s IPO market has revived strongly, especially for Chinese tech and AI names, but many recent listings have performed weakly after debut. That has made investors more price-sensitive and pushed issuers to offer “digestible” valuations to secure demand and reduce the risk of a poor aftermarket. Lingyi’s offer document also says the H-share price will be set with reference to the Shenzhen closing price, but investors still expect a Hong Kong discount. In practice, the company is paying an entry discount to access offshore capital, broaden its investor base, and complete a large HK$8.3 billion fundraising in a market where robotics enthusiasm alone is not enough to eliminate valuation pressure.

1 articles · Updated · Bloomberg · Jun 17

HK$8.3 billion ($1.06 billion) is the target as Lingyi iTech opened investor books for its Hong Kong share sale on Wednesday.
811.8 million shares are being offered at up to HK$10.18 each, setting the deal’s maximum size and pricing range.
That top price implies a 44% discount to Lingyi’s Tuesday close of 15.69 yuan in Shenzhen, where the electronics-components maker is already listed.
The offering would give the Chinese company fresh capital through a second listing in Hong Kong amid continued demand for sizable equity raises.