FAST NEWS: Miniso Raises Only $72 Million With Conservative IPO Pricing

The latest: Miniso Group Holding Ltd. (MNSO.US), a Chinese retailer plans a secondary share listing in Hong Kong on July 13 to complement its existing U.S. listing, announced Wednesday it has priced its Hong Kong shares at HK$13.80, about 37.5% below the maximum offering price of HK$22.1, raising about HK$567 million ($72 million).

Looking up: Miniso’s lower offering price in Hong Kong, coupled with what it’s calling its “dual primary listing” status, will allow it to be traded on the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect programs, making those shares available to mainland Chinese investors and increase liquidity and beneficial to the share price.

Take Note: The American depositary share (ADS) price of Miniso closed at $7.78 on Wednesday, which translates to approximately HK$15.27, with each ADS representing four Hong Kong shares, implying a discount of approximately 9.6% to the Hong Kong IPO pricing. That reflects management’s conservative pricing stance.

Digging Deeper: A dual primary listing means that Miniso will count both the U.S. and Hong Kong as its primary listing places. Since the company has been placed on the growing list of Chinese companies that could be forcibly delisted for failing to comply with the Holding Foreign Companies Accountable Act (HFCAA) by the U.S. Securities and Exchange Commission (SEC), the choice of listing on the Hong Kong stock market, where the regulatory authorities and investors are relatively friendly, will provide greater protection for the company’s listing status.

Market Reaction: Miniso’s ADS rose 7.8% to close at $7.78 on Wednesday, but is still down 61% from the company’s IPO price of $20 on late 2020.

Translation by Jony Ho

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