The shares of the Chinese firm, backed by Tencent Holdings, opened at HK$338 ($43.60) and rose to HK$345, versus the HK$115 apiece they fetched in the IPO. Kuaishou‘s $5.4 billion float is the largest in Hong Kong since Budweiser’s Asia unit raised $5.75 billion in 2019.
Retail investors bid for 1,204 times the amount of Kuaishou shares on offer for them, mostly backed by borrowed money, as the initial public offering closed on Friday.
“The demand for the IPO was massive because it is a leader in online video … and investors have been waiting for this one since the Ant IPO was cancelled,” said Louis Tse, managing director of brokerage Wealthy Securities.
Chinese fintech giant Ant Group’s $37 billion dual-listing in Hong Kong and Shanghai, which would have been the world’s biggest, was suspended just days before the scheduled debut in November following a regulatory crackdown.
The Kuaishou debut adds to a string of recent blockbuster Hong Kong listings, which analysts see as a promising sign for others looking to raise capital in the Asian financial hub.
JD Health International Inc gained 56% when it debuted in December after raising about $3.48 billion.
But these come against the backdrop of growing fears about an asset bubble, with amateur investors boosting the price of assets ranging from cryptocurrencies to new market listings.
Those concerns, triggered by a sharp rise and fall in U.S. videogame retailer GameStop and a few other stocks, have prompted some brokerages globally to raise margin requirements or stop offering leverage for buying securities.
Individual investors in Hong Kong, which has among the highest retail trading levels in the world, are renowned for borrowing heavily as larger bids boost the chances of being allocated shares in an IPO.
Tse said the surge in Kuaishou shares was mainly a result of demand from investors in mainland China, who cannot invest in IPOs but can buy in the secondary market, and retail investors in Hong Kong who failed to get shares in Kuaishou‘s IPO.
“This bodes well for other Hong Kong IPOs, if the companies are well known on the mainland,” he said.