Sinochem Energy, a unit of China’s state-owned Sinochem Group, has allowed its application for a Hong Kong initial public offering (IPO) to lapse, the exchange website showed on Wednesday.
Sinochem Energy had sought to raise up to $2 billion from the listing, banking on a new technology platform to boost its valuation.
The company put the IPO on hold late last year because it was likely to only raise around $1.2-$1.3 billion based on early investor feedback, a source with knowledge of the matter told Reuters.
The plan would be shelved for the next one to two years, the source added.
Sinochem Energy operates the group’s oil and petroleum products trading, refining, storage and logistics, as well as distribution and retail businesses, but not its struggling upstream business that includes overseas oil and gas production.
Sinochem Energy’s application expired on Wednesday six months after it was filed, according to the Hong Kong Stock Exchange website.
The company did not immediately respond to a request for comment.
Another source told Reuters earlier in January that the IPO had been put on hold partly because of a change in leadership.
Zhang Wei, the company’s general manager, moved to China National Petroleum Corp (CNPC) in December.
Sinochem Energy operates one of China’s largest commercial oil tank farms, with 32 million barrels of storage capacity, and has some 800 petrol stations under its brand.
It launched a technology platform last year to help create value for the IPO, but has since reduced its 1,000-strong workforce by 300 jobs and plans to cut another 200 positions, sources said.
Tough IPO Conditions
Sinochem Energy is not the first company to have to scale back or abandon plans to list in Hong Kong.
Canaan Inc, one of the world’s leading cryptocurrency mining equipment makers, let its application lapse in November while biotech company CanSino Biologics let its application expire earlier this month, the exchange website showed.
Hong Kong took the global crown for volumes raised through IPOs last year, with $36.3 billion sold in the financial centre, according to Refinitiv data.
The performance of IPOs has been a different story, with many companies falling below their offer prices, including smartphone maker Xiaomi Corp and online food delivery-to-ticketing services provider Meituan Dianping .
Other firms have raised a fraction of their original targets, including online ticketing firm Maoyan Entertainment and parenting website Babytree Group.
Market volatility driven by China-U.S. trade tensions and slowing growth in China have cast a shadow on the IPO ambitions of many companies, with bankers expecting 2019 to continue to be challenging.
BOC International, CLSA and Morgan Stanley had been working on Sinochem Energy’s float.