A worker debugs a robot at a Sany Heavy Industry plant in Changsha, central China’s Hunan Province, on Feb. 20, 2020.
Chen Zeguo | Xinhua News Agency | Getty Images
China’s Sany Heavy Industry rose over 3% on its Hong Kong trading debut Tuesday after raising HK$12.36 billion ($1.59 billion) in one of the city’s largest listings this year.
Shares were priced at HK$21.30 apiece. The listing adds to a pickup in Hong Kong equity fundraising, following recent sizable offerings such as Zijin Gold International’s $3.2 billion initial public offering on Sept. 30.
Sany’s Shanghai-listed stock has gained over 35% so far this year. The company, founded in 1994, is among the world’s largest makers of construction machinery, producing excavators, cranes, road-building equipment and pile drivers.
China International Capital Corp. acted as the sole sponsor and overall coordinator for the initial public offering. Other banks on the deal included BOC International, Industrial and Commercial Bank of China, Agricultural Bank of China and China Merchants Bank.
Cornerstone investors included Hillhouse, BlackRock, Temasek and Infore Capital. Sany said it plans to use the funds for overseas expansion, R&D, digital upgrades and sustainability efforts.
“Despite a strong international growth narrative and robust recent performance, Sany Heavy Industry’s [Hong Kong] listing is unlikely to unlock a materially higher valuation,” said Lenny Zephirin, analyst at The Zephirin Group.
He said investor sentiment toward China’s construction and heavy machinery sector remains cautious, constrained by cyclical headwinds, excess capacity, and limited visibility on domestic infrastructure demand.
While the Hong Kong listing should enhance the company’s liquidity and visibility, Zephirin added that a valuation re-rating is unlikely without meaningful gains in capital efficiency or strategy execution.
