Post by : Jyoti Gupta

Zhejiang Sanhua, a Chinese company that makes parts for air conditioners and electric cars, started trading on the Hong Kong stock market. But its first day didn’t go as planned. The stock price fell by 7.2%, even though many people were excited about the company’s IPO (Initial Public Offering).

Sanhua raised a large amount of money—HK$9.3 billion (about US$1.2 billion)—from the public, which made it one of the biggest IPOs of the year in Hong Kong. It had lots of interest, with retail investors applying for 747 times more shares than they were offered, and big investment funds also jumping in.

Because of this demand, the company gave more shares to regular people, increasing the retail share to 26.5%. The rest went to big global funds like Schroders, GIC, and others who agreed to hold the shares for at least six months.

Even though earlier IPOs this year—like those of CATL and Jiangsu Hengrui—had a strong start, Sanhua’s debut was weaker. Experts say many people were just trying to make quick profits, borrowing money easily from brokers. Retail investors borrowed over HK$340 billion to buy Sanhua shares.

Sanhua is a global leader in cooling system parts and works with top EV brands like Tesla and BYD. The company plans to use the money it raised to grow its research teams in China, the US, and Germany, expand factories, and improve digital systems.

The company’s chairman said listing in Hong Kong is a big step toward going global, and he promised to use the funds to benefit investors and customers.

Hong Kong Stock Exchange