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Autohome misses Hong Kong share sale target by nearly one-third

Baidu and others from China face risk of lower prices on secondary listings

Autohome's lackluster listing in Hong Kong is unwelcome news for other companies planning to list their shares on the bourse.   © Reuters

HONG KONG -- Chinese car sales website Autohome has raised $688 million through a secondary listing in Hong Kong, as the global equity market turmoil left the company with almost one-third less than expected when it opened the offering, two people familiar with the transaction say.

The market volatility could dampen sentiment for a slew of companies, including search giant Baidu, waiting to list in Hong Kong, those sources said.

Autohome priced its Hong Kong offering at 176.3 Hong Kong dollars a share, a 5.5% discount to its Monday close on the New York Stock Exchange. That compared with the maximum price of HK$251.8 the company guided at the launch last week, which would have raised $984 million.

The pricing was impacted by the global equity sell-off. Autohome's American depositary receipts have lost 17.3% in New York since the secondary listing opened March 2 and 30% from a Feb. 16 high. On Monday, the shares slid 12.5%. One American depositary receipt equals four Hong Kong shares.

"There was more than enough demand, and we were quite enthused by investor support," one of the sources said. "The New York trading determined the pricing. Given the way markets are trending, we might see companies pause before they launch their share sale now."

Baidu on Tuesday filed its preliminary prospectus for the secondary listing after gaining approval from the Hong Kong stock exchange's listing committee last week. The filing gave no timing for the offering. Baidu, which trades on Nasdaq, has lost one-third of its value since Feb. 19. The shares surged 9% in morning trading on Tuesday, local time.

Global markets have been overwhelmed by volatility in the past week, with technology stocks bearing the brunt of the sell-off. The Nasdaq 100 has fallen 11% from its record high while China's CSI 300 index has declined almost 15% from its peak hit in February.

Autohome sold 30.29 million shares through the offering, and underwriters have an option to take up another 4.54 million shares as part of the overallotment option. The company is due to debut in Hong Kong on March 15. Autohome shares were down 0.9% on the NYSE in early trading on Tuesday.

Volatile markets could impact deal flow. Besides Baidu, other China-based businesses expected to sell shares in Hong Kong are U.S.-listed companies such as Tencent Music Entertainment Group, the Twitter-like service Weibo, short-video app Bilibili and e-commerce operator Vipshop Holdings. JD Logistics, a unit of online retailer JD.com, ByteDance's Douyin and ANE Logistics are among those working on an initial public offering, people familiar with those matters have said.

New listings in Hong Kong have enjoyed the best start ever in 2021. Nineteen companies have raised a total of $9.5 billion, compared with just $1.2 billion during the same period last year, according to data compiled by Dealogic.

Last year, a total of 137 companies raised $51.6 billion in the city, including $17 billion by mainland companies traded on American exchanges.

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