By Scott Murdoch and Donny Kwok
SYDNEY (Reuters) -Duality Biotherapeutics stock more than doubled on its Hong Kong debut on Tuesday, achieving the best first-day trading performance following an IPO in the city in four years.
The Chinese biotech firm raised $213 million in an initial public offering launched the day financial markets reacted savagely to a U.S. tariffs announcement.
The stock rose as high as HK$222 each, a gain of 134.7% from its HK$94.60 issue price. Hong Kong’s Hang Seng Index was up 0.1%. Duality shares were off their peak late in the session but were still up 112%.
It was the best first-day performance for an IPO that raised more than $100 million since Angelalign Technology rose 132% on its first day in June 2021, Dealogic data showed.
Duality sold 17.33 million shares in its IPO at the bottom of a HK$94.60 to HK$103.20 indicative price range. It initially planned to sell 15.1 million shares but exercised an option to increase the number due to demand, regulatory filings showed.
Book-building started on April 7 when the Hang Seng Index dropped 13%, the benchmark’s worst one-day performance since 1997.
Duality is developing therapeutic drugs for cancer and autoimmune disease patients, its prospectus showed.
The majority of its products are unlikely to be subject to U.S. import tariffs because of licensing agreements, analysts said. That contributed to the stock’s popularity, they said.
“The success of the deal is a positive sign that when a deal has solid fundamentals it will be able to garner interest in this volatile market,” said Aequitas Research analyst Ke Yan who publishes on Smartkarma.
“It’s also an indication that international investors are returning to China.”
Eleven cornerstone investors from both China and abroad subscribed to $65 million worth of Duality stock.
The IPO also attracted strong interest from retail and institutional investors, Duality’s filing showed, even at a time of global financial market turmoil.
Retail investors applied for 115 times the shares on offer while the institutional portion was covered 13.5 times.
“Due to geopolitical conflict, investors are actually reassessing IPO prospects in the U.S. which means Hong Kong IPOs could be more popular in the future,” said Criss Wang, an independent capital markets analyst.
Hong Kong’s Hang Seng Biotech Index is up 23.4% so far this year versus 6.76% for the Hang Seng Index.
(Reporting by Scott Murdoch in Sydney and Donny Kwok in Hong Kong; Editing by Jamie Freed and Christopher Cushing)
