China's Huatai aims to raise at least $1.2bn in London listing

Edmund Heaphy
·Finance and news reporter
Updated
People stand above an electronic board showing the Shanghai and Shenzhen stock indexes, on a pedestrian overpass at Lujiazui financial district in Shanghai, China May 16, 2019. REUTERS/Aly Song
Stock quotes from stock indexes on a pedestrian overpass in Shanghai's financial district. Photo: Reuters/Aly Song

Huatai Securities, one of China’s largest brokerages, plans to raise at least $1.2bn (£945m) when it becomes the first Chinese company to sell shares on the London Stock Exchange later this month, the company said on Tuesday.

Huatai set a price range of $20 to $24.50 for its global depository receipts, a type of certificate that Chinese-listed firms can now use to trade shares in London as part of the Shanghai-London Stock Connect project.

Some 82.5 million of the receipts will go on offer from Tuesday until Friday, representing 10% of the company’s total share capital.

The company could therefore end up raising up to $2.02bn. The final offer price and the number of receipts that will be sold will be decided on 14 June, Huatai said in a statement.

Trading of the receipts is expected to begin around 20 June.

The move marks the first use of the Connect project, which was first mooted in 2015. Until the end of last year, Chinese-listed companies were forbidden from listing their shares outside of China or Hong Kong.

The project essentially connects the London Stock Exchange with the Shanghai Stock Exchange, and also allows London-listed firms to launch offerings in China.

“Huatai will offer international investors exposure to China's financial services market, which has grown strongly as personal wealth has rapidly accumulated and capital markets have developed,” Huatai president Zhou Yi said in a statement.

“Our London listing is the next step in our creation of a truly global business, expanding our international presence and providing new resources to support our growth strategy.”

The company previously said that it would use the money raised from the listing for international expansion.

Huatai originally planned to list its shares in December, but abruptly cancelled it for unspecified reasons even after it won approval from China’s securities watchdog.

JPMorgan, Morgan Stanley, and Huatai itself are underwriting and coordinating the deal.

The brokerage mainly engages in wealth and investment management for clients.

Before the launch of the Connect project, many Chinese companies opted to list on US stock exchanges instead of solely in China.