Nexchip falls flat in trading debut as IPO sentiment weakens
Shares of wafer foundry service provider Nexchip Semiconductor Corp. (2249.HK) opened up 11.5% in their Hong Kong trading debut on Friday, but then gave back the gains to close unchanged by the end of the day.
The company sold 216 million shares priced at HK$32.30 each, raising net proceeds of HK$6.78 billion ($869 million). Its public offering for local investors was oversubscribed by 343 times, while the international placement was oversubscribed by 13.6 times. Twenty cornerstone investors purchased 108 million shares, or roughly half of the offering.
Last year, the company generated 10.39 billion yuan ($1.53 billion) in revenue, up 14% year-over-year, while its profit rose 32% to 704 million yuan. But its gross margin for the year fell 2.5 percentage points to 22.7% from 25.2%.
The company will use 53.6% of the IPO proceeds to develop and optimize its next-generation 22 nm technology platform, while about 23.1% is slated for smart research and development and production plans based on AI technology. Roughly 13.3% will be used for building an R&D and sales center in Hong Kong, with the remaining 10% is earmarked for general working capital.
By Lau Chi Hang
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