Chinese chipmaker SMIC to raise $6.55b in Shanghai share sale

Photo by Alexandre Debiève on Unsplash

China’s Semiconductor Manufacturing International Corp (SMIC) will raise 46.29 billion yuan ($6.55 billion) in a Shanghai share sale, more than double its initial target, pricing its offering following a surge in its Hong Kong-listed stock.

The company, which had originally sought to raise about 20 billion yuan, set the sale price of its shares to be traded in Shanghai at 27.46 yuan each, it said in a filing to the Shanghai Stock Exchange on Sunday.

The offering values the company at 109.25 times its 2019 earnings, based on the expanded share base, according to the filing. By comparison, rival Taiwan Semiconductor Manufacturing Co Ltd (TSMC) has a trailing price-earnings ratio of 21.315.

SMIC’s fundraising comes as the Shanghai-based firm bulks up its war chest amid broader tech-related tensions between the United States and China, and will be used to fund projects and replenish operating capital.

Established in 2000, SMIC is mainland China’s top semiconductor foundry and competes with Taiwan-based TSMC, which has more advanced technology.

SMIC’s Hong Kong-listed shares rose more than 5% on Friday to HK$33.25, and have surged 172.5% since the end of March.

The deal’s underwriter, Haitong Securities, has the option to expand the IPO size by 15%,meaning SMIC can raise as much as 53.23 billion yuan.

The institutional portion of the deal was nearly 165 times subscribed, the company said.

Two big sovereign wealth funds, Singapore’s GIC Private Limited and Abu Dhabi Investment Authority, subscribed as strategic investors for shares worth 3 billion yuan and 400 million yuan, respectively, SMIC said.

China’s National Integrated Circuit Industry Investment Fund, popularly known as “the big fund”, is investing 3.5 billion yuan in the company, SMIC said.

SMIC’s online subscription, mainly targeting individual investors, will start on Tuesday, it said.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.