Chinese companies dominated the Hong Kong IPO market in the weeks before the lunar New Year, raising a combined HK$5.4 billion (US$663 million). While all drew strong demand from retail investors, performance following the trading débuts disappointed.

Retail oversubscription for aluminum products maker PanAsialum was above 52× and thus triggered a clawback, increasing the retail tranche to 40% and reducing the institutional tranche from 90% to 60%. Priced at HK$4.13, well above the midpoint of the indicative price range, shares lost 13.1% throughout the course of the first trading day and continued their decline until mid-February. The company raised HK$1.24 billion (US$160 million).

HSBC and J.P. Morgan are joint global coordinators and sponsors as well as joint bookrunners, alongside ABC International and UBS.

Performance of the stock recalled the fate of the largest IPO in January - Chinalco Mining, an overseas spin-off of state-owned Aluminum Corporation of China (Chalco) that raised HK$3.37 billion (US$399 million) primarily for the development of its greenfield copper mine in Peru. The retail portion of the deal was 25× oversubscribed and secured heavyweight cornerstone investors from the mining industry.

Yet, shares plummeted to HK$1.64, down 7% from the original pricing of HK$1.75 on its January 31 début. After a partial recovery, the stock continued its decline to HK$1.53 after the lunar New Year.

BNP Paribas, CCB International, CICC, HSBC, Morgan Stanley and Standard Chartered arranged Chinalco Mining's listing.

With one of the highest retail subscriptions ever, Time Watch Holdings was the single Chinese company listing in Hong Kong able to close with a premium to its offering at the end of the first trading day.

However, the 2.2% rise followed a much more impressive retail tranche oversubscription of 650× before trading commenced, leaving some observers disillusioned. The private equity-backed timepiece maker raised HK$810 million (US$104 million) with DBS Bank acting as sole bookrunner and also joint sponsor with CIMB. - CK