HONG KONG (BLOOMBERG) - Hong Kong's newly listed companies are set to become Asia's worst performers this year amid China's crackdown on various sectors.
Companies that went public in the city after initial public offerings of at least US$100 million are down almost 20 per cent on average from IPO prices, according to data compiled by Bloomberg.
That compares with gains of 40 per cent in South Korea, 32 per cent in India and 86 per cent in mainland China, where new stocks often climb due to tight approval IPO systems based on informal upper limits on valuations.
Hong Kong's IPO market has cooled since the initial frenzy driven by cheap funding and ample cash. While first-half proceeds surged 130 per cent on a yearly comparison, the following months were marked by an almost complete absence of major deals due to China's crackdown on several industries.
Some major tech names that initially did well after listing early in the year lost altitude as Beijing's clampdown targeted giant startups with vast data on Chinese citizens.
Kuaishou Technology, which debuted in February, almost doubled in value by June, only to erase gains and slump 30 per cent since listing. About 75 per cent of the 59 companies that began trading in Hong Kong since January are poised to finish the year lower than their IPO price. Equivalent percentages are 34 per cent in India and 28 per cent in South Korea.
Companies that are in line with China's new economy are bucking the trend. Electric vehicle makers Li Auto and XPeng are up more than 3 per cent and 6 per cent, respectively, since listing in the second half. Biotech names including Brii Bioscience and Medlive Technology have climbed more than 30 per cent.