Zijin Gold soars 68.5% in HK debut, following world’s biggest IPO since May
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Zijin Gold came to market as optimism remains high for prices of the precious metal to extend their three-year, record-breaking bull run.
PHOTO: REUTERS
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HONG KONG - Zijin Gold International jumped in its Hong Kong trading debut on Sept 30 after the international unit of China’s biggest miner raised US$3.2 billion (S$4.1 billion) in the world’s largest initial public offering (IPO) since May.
The shares soared 68.5 per cent to close at HK$120.60, valuing the company at HK$342.5 billion (S$56.8 billion) and overtaking the likes of Chile-based Antofagasta, one of the world’s biggest copper miners.
Zijin Gold came to market as optimism remains high for prices of the precious metal to extend their three-year, record-breaking bull run
It is also a victory for Hong Kong, which now boasts being home to the world’s two biggest listings of the year, as IPO proceeds in the city head for a four-year high.
“Zijin Gold has definitely picked the best time to go IPO,” said Ms Michelle Leung, an analyst at Bloomberg Intelligence. “The continuous surge in gold prices has driven up valuations across global gold miners.”
Zijin Gold’s IPO valuation was at a 26 per cent discount to its peers as at Sept 28, she said.
The prospect of buying into an undervalued blue-chip stock attracted a marquee list of cornerstone investors that included the likes of Singapore sovereign-wealth fund GIC, Hillhouse Investment, BlackRock, Fidelity International and Millennium Management. These buyers, which get IPO allocations in exchange for holding the stock for at least six months, agreed to buy about half of the shares on sale.
The company and its parent Zijin Mining Group are not the only ones to have benefited from the rally in gold. PT Merdeka Gold Resources began trading in Jakarta in September after raising more than US$280 million in Indonesia’s largest IPO this year, and Shandong Gold Mining sold about US$500 million of stock.
As for Zijin Gold, the company plans to use some of the IPO proceeds to pay for the acquisition of a mine in Kazakhstan, as well as funding upgrades and construction of mines over the next five years, it said.
The company, which operates Zijin Mining Group’s overseas gold assets, is one of the world’s fastest-growing gold producers, with mines spanning across Central Asia to Australia, Africa and South America.
The only company to have had a bigger listing this year was Contemporary Amperex Technology’s US$5.3 billion mega deal, which was also in Hong Kong, in May. After years of struggling through a drought of deals, the Asian financial hub is poised to see IPO proceeds surge to a four-year high of more than US$26 billion, according to Bloomberg Intelligence estimates.
Zijin Gold’s trading debut, originally scheduled for Sept 29, was delayed by Super Typhoon Ragasa. Morgan Stanley and Citic Securities were joint sponsors for the IPO. BLOOMBERG
