FAST NEWS: LX Technology Declines after Popping on Trading Debut
The latest: LX Technology Group Ltd. (2436.HK), a renter and seller of refurbished IT equipment, opened in Hong Kong with an initial 3.9% rise from its IPO price of HK$7.60 in its trading debut on Thursday.
Looking up: The local portion of the company’s offering was subscribed by 9,672 investors for a total of 32.8 million shares, representing an oversubscription rate of 5.61 times.
Take Note: The international portion of the listing was only fully subscribed and priced at the bottom of the IPO price range of HK$7.60 to HK$8.74.
Digging Deeper: LX Technology was established in 2004 and became China’s largest used computer wholesaler just four years later. Although it calls itself a technology company, its main revenue comes from leasing and selling used IT equipment under the “Little Bear Rental” brand by refurbishing old computers and other equipment bought from large companies. The company did not record any profits in its IPO prospectus, which would disqualify most companies for a listing based on Hong Kong rules. But it still passed its listing hearing on Oct. 20 after meeting the exchange’s alternate requirements for revenue, cash flow and market capitalization.
Market Reaction: After initially opening higher, LX Technology shares fell back on Thursday morning and were down 3.8% at HK$7.31 by the midday break, valuing the company at about HK$2.6 billion ($333 million).
Translation by Jony Ho
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