(Yicai Global) Aug. 8 -- Shares of China Tower Holding, the world's biggest initial public offering in two years, ended their trading debut in Hong Kong unchanged today, avoiding the fate of smartphone maker Xiaomi, which fell below its offer price on listing a month ago.

Beijing-based China Tower [HK:0788] closed at HKD1.26 (USD0.16), the same as its offer price. The world's largest wireless infrastructure owner by sales raised USD6.9 billion, valuing it at USD28 billion. The benchmark Hang Seng Index gained 0.4 percent.

Chinese firms have chalked up some underwhelming IPOs in Hong Kong lately, with Xiaomi closing 1.2 percent lower on July 9. Xiaomi founder Lei Jun pointed to the depressed stock market to explain his firm's lackluster start. Chinese equities have fallen across the board in past months amid a trade conflict with the US.

China's e-commerce giant Alibaba Group Holding still holds the global record with its USD25 billion IPO in New York in 2014.

China Tower issued 43.1 billion new shares, representing 25 percent of its enlarged share capital. Hillhouse Capital was the largest subscriber, buying USD400 million worth of stock. Some of the other nine cornerstone investors included Och-Ziff Management Group, Alibaba and its online retail site operator Taobao, and state-owned PetroChina. They invested a total of USD1.4 billion.

Spending Plans

China Tower plans to use 60 percent of the IPO proceeds to run its core operations involving upgrades in tower infrastructure as the country builds a first fifth-generation mobile network.

China Tower was formed in 2014 through a merger of the infrastructure businesses of China's three state telecom giants: China Mobile, China Unicom and China Telecom. It mainly works in construction, maintenance and operation of base station auxiliary facilities such as telecom towers, public networks in high-speed trains and metros, as well as large indoor distribution systems.

After going public, the company needs to seek new sources of profit growth beyond its traditional telecom service partners, Fu Liang, an expert on the telecoms sector, told Yicai Global on July 12. Some 99 percent of the firm's revenue comes from the three state telecom companies. Some of the IPO funds may go toward exploring new business opportunities.

The checks and balances among its three owners and the further dilution of their stakes in China Tower will give the company more business independence, Fu said.
 

Editor: Emmi Laine