By Kane Wu and Scott Murdoch
(Reuters) -Pony Ai and WeRide stocks plunged around 10% each Thursday as the Chinese autonomous driving developers started trading in Hong Kong, with analysts pinning the blame on new-listing oversupply as well as the firms’ overseas share performance.
WeRide shares closed down 10% from their issue price while Pony Ai stock lost 9.3%, after the two companies raised almost $1.2 billion in separate public share offerings.
The weak performance came one day after electric vehicle maker Seres Group closed its debut session flat. The stock lost 4.6% on Thursday.
Hong Kong’s Hang Seng Index reversed a two-day sell-off and ended 2.1% higher.
Hong Kong’s equity capital markets have become the world’s most active this year, with $31.25 billion raised in initial public offerings and secondary listings, LSEG data showed.
The rush of deals means Hong Kong has overtaken the New York Stock Exchange and Nasdaq as the top listing venue this year, excluding special purpose acquisitions companies.
“This (selldown) is partly due to the recent concentration of new listings” meaning there is less money available for each listing hopeful, said Kenny Ng, a strategist at Everbright Securities International in Hong Kong.
“The overall lack of directional momentum in the Hong Kong stock market has also impacted the share performance,” he said, referring Pony Ai and WeRide.
Pony Ai raised about $863 million and WeRide raised nearly $308 million in their share offerings.
WeRide proved more popular among Hong Kong’s army of retail investors, with that tranche of the listing more than 77 times oversubscribed, regulatory filings showed.
Its institutional tranche was about 10 times covered while Pony Ai’s was nearly eight times covered, the filings showed.
Pony Ai founder and CEO James Peng said at the listing ceremony that “recent events” and liquidity in the U.S. have had a “temporary” impact on the firm’s shares in Hong Kong, which are anchored to its stock traded in the U.S.
“We will use the funds raised for large-scale commercialisation so you can expect our business to expand,” Peng said. “Short-term stock price fluctuation will not affect our development. Shareholders can rest assured.”
WeRide plans to use its listing proceeds for hiring top talent, enhancing computing capability, global expansion and to establish a sales network, said founder and CEO Tony Han.
“It’s normal for shares to fluctuate. In the long-term we are very confident in our stock performance,” Han said.
The weak performance follows a drop in the companies’ shares in New York on Wednesday. WeRide shares lost 5.2% while Pony Ai fell 2%.
Two other Chinese firms debuted in Hong Kong on Thursday.
Vigonvita Life Sciences shares surged as much as 191% to HK$97 apiece, nearly tripling the HK$33.37 price of an initial public offering in which it raised HK$587 million. It was trading up 153% later in the day.
Ningbo Joyson Electronic saw its shares slip about 7.2%. The supplier of automotive electronics and safety components, which is already listed in Shanghai, raised HK$3.41 billion from shares priced HK$22 each.
While Vigonvita gained, the weak debuts of the other three was partly down to performance of their China or U.S. shares, said George Au, deputy sales director at Phillip Securities.
The IPO market has not cooled, as demonstrated by Vigonvita’s offering that was more than 6,000 times oversubscribed, Au said.
(Reporting by Kane Wu and Scott Murdoch; Additional reporting Jiaxing Li; Editing by Kim Coghill and Christopher Cushing)
