Shanghai's Star Market Pioneer HYC Technology Sees IPO Oversubscribed 258 Times
Zhang Yushuo
DATE:  Jun 26 2019
/ SOURCE:  yicai
Shanghai's Star Market Pioneer HYC Technology Sees IPO Oversubscribed 258 Times Shanghai's Star Market Pioneer HYC Technology Sees IPO Oversubscribed 258 Times

(Yicai Global) June 26 -- Demand for shares in Chinese test equipment maker HYC Technology, the first company poised to sell stock on the Shanghai Stock Exchange's new Star Market, has exceeded supply by 258 times.

HYC Technology will issue as many as 40.1 million ordinary shares priced at CNY24.26 (USD3.50) each, looking to raise CNY10.1 billion (USD1.5 billion), the Suzhou-based firm said in a statement today. With nearly 1,300 investors having shown interest in buying at that price or above, it aims to start its online placement tomorrow.

Founded in 2005, HYC Technology makes testing systems for semiconductors and displays. The company counts Apple, Samsung, and LG Electronics among its clients.

The massive oversubscription to the firm's share issue confirms expectations of intense interest in the much-anticipated new trading venue. The Nasdaq-style market, formerly known as the Science and Technology Innovation Board, was officially launched on June 13 and aims to make it easier for tech startups to secure funding.

Despite fears of excessive pricing, HYC's offer price fell within an anticipated range, an insider in the sector told the China Securities Journal. Huatai Securities expected a price of between CNY21.17 and CNY25.73, while GF Securities projected CNY22.5 to CNY27. Huachuang Securities bet on CNY23.24 to CNY31.34 a share.

The company's price-to-earnings ratio is 41.08, based on the issue price. The sector's average ratio was 31.11 as of June 24, according to the China Securities Index.  

HYC Technology was among the first companies approved to list on the Star Market, around which there is much excitement. The board, which will start trading within two months, Shanghai Stock Exchange Chairman Huang Hongyuan said on June 13, will be empowered to rein in extreme market volatility by temporarily halting trading in firms if their share prices reach a designated limit over the first five sessions. 

Demand may greatly outstrip supply when the board debuts, a departmental head at China's securities regulator told Yicai Global earlier this month. But Yi Huiman, chairman of the China Securities Regulatory Commission, has called on investors and traders to treat the new board calmly and rationally.

Editor: Emmi Laine

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Keywords:   IPO,Sci-Tech innovation board,STAR Market,HYC Technology