Hong Kong IPO filings reveal cross-investments and personal connections
New disclosures from Hosin Electronics and Jiangsu Xinde Semiconductor show industry partners acting as cornerstone investors.
Hong Kong listing applicants are providing more detail regarding their initial public offerings, revealing ties between investors and companies, according to a report by Mint.
In a prospectus released on Friday, Chinese memory maker Hosin Electronics Co. disclosed that corporate allies and personal acquaintances would act as cornerstone investors. These backers, who receive guaranteed stock allocations, agreed to absorb up to 42 per cent of the HK$1.22 billion ($156 million) offering.
Hosin's cornerstone backers include smartphone maker Shenzhen Transsion Holdings Co. and chip supplier Shenzhen Longsys Electronics Co. The filings show that Hosin had previously served as a cornerstone investor for the Hong Kong listings of both companies this year.
The prospectus also noted that Hosin connected with wealthy individual investors through industry meetups and mutual acquaintances. For example, investors Yeh Pei-Chen and Chen Chun-Cheng were introduced via an unnamed acquaintance, while businesswoman Liu Ling was introduced by a member of management.
In another Friday filing, Chinese chip assembly firm Jiangsu Xinde Semiconductor Technology Co. identified three cornerstone buyers taking up about a third of its $130 million offering. One of these buyers is Suzhou Maxwell Technologies Co., which is also a supplier to the firm.
These disclosures come as Hong Kong regulators increase scrutiny of the IPO market. An October 13 circular from the Securities and Futures Commission urged banks to investigate investor relationships to ensure the genuineness of buyer demand.