Shares of Chinese appliance maker Midea Group who had a crack at trying to buy Electrolux last year, have soared after a new listing in Hong Kong.
The Company that is having a major crack at growing their presence in Australia after setting up an office in Melbourne saw their stock jump close to 10% in what was
Hong Kong’s biggest listing in three years.
There is even speculation that the business who are one of the biggest manufacturers of appliances in the world could have another go at trying to buy their way into the European market via an acquisition with insiders not ruling out another crack at trying to acquire Electrolux.
The company, founded in 1968, sells air conditioners, washing machines, elevators and other products. Some of the share sale proceeds would be used to expand its global distribution channels and sales network to boost overseas sales, it said. Midea’s shares are already traded in Shenzhen.
Midea’s Hong Kong debut may be arriving at an opportune time for the company. Home appliances are Citi’s most preferred sector among China’s consumer discretionary industries in the second half of this year given “higher earnings visibility,” the Citi analysts wrote.
The initial offering was priced at HK$54.80 which as end of the marketed range according to Bloomberg.
Midea sold 566 million shares after exercising an option to boost the size of the offering by 15% due to demand, it said.
The international portion, which represents 95% of the offer, was subscribed more than eight times before considering the offer size adjustment option, it said in a filing.
The company, founded in 1968, sells air conditioners, washing machines, elevators and other products.
The Company admits that the new capital will be used to expand their global distribution channels and sales network to boost overseas sales and for acquisitions.
Analysts believe that second-half sales growth could accelerate as the Chinese government continues to promote its “trade-in” policy, in which consumers and businesses are encouraged to upgrade existing appliances and equipment.
“We expect the ‘Trade-in’ policy to cover all China provinces by October,” the Citi analysts wrote in another note.
