Tong Ren Tang healthcare unit pulls Hong Kong IPO scheduled for Monday

Beijing Tong Ren Tang Healthcare Investment, a provider of healthcare services based on traditional Chinese medicine, postponed its Hong Kong initial public offering (IPO) on Friday, citing “prevailing market conditions” and other factors. The company was one of six trading debuts slated for Monday, including an exchange-traded fund (ETF) and firms involved in AI and robotics. The firm had aimed to raise up to HK$897.7 million (US$115 million) by offering 108.15 million shares at between HK$7.30 and HK$8.30 each. Retail and institutional investors who submitted applications for the company’s shares would receive full refunds by March 30, according to a filing with the Hong Kong stock exchange. Investor demand had been tepid, with the public tranche 4.85 times oversubscribed, according to data compiled by broker Futu. About 10 per cent of the offering was earmarked for retail investors, with the remainder allocated to institutional investors. “Its public tranche drew relatively lukewarm demand compared with other IPOs in the market,” said Mike Leung Kit-man, director of Wocom Securities. “The management likely weighed the weak subscription, recent market volatility and the risk of a poor post-listing performance before deciding to pull the deal.” The company cleared its listing hearing in the latter part of last year but waited months before launching the offer. It only moved ahead recently as the financial data in its application neared expiry, Leung added. Founded in 2015, the company is a healthcare services arm of the Tong Ren Tang Group, one of China’s oldest traditional Chinese medicine brands, which traces its roots to 1669. In 2024, Beijing Tong Ren Tang Healthcare Investment was China’s largest private-sector hospital network focused on traditional Chinese medicine, commanding a 1.7 per cent market share, according to its prospectus. The postponed offering would have made the company the group’s fourth listed entity, following Beijing Tongrentang, Tong Ren Tang Technologies, and Tong Ren Tang Chinese Medicine. The other debuts on the agenda on Monday are industrial automation and robotics specialist Guangdong Huayan Robotics, AI-powered diagnostics platform Hangzhou Diagens Biotechnology, AI and machine-vision solutions provider Shandong Extreme Vision Technology, semiconductor maker Epiworld International and Fullgoal Hang Seng Stock Connect Hong Kong Dividend ETF, which tracks low-volatility, high-yield Hong Kong stocks that are eligible for trading by mainland investors via the southbound Stock Connect mechanism. Epiworld International aims to raise the most funds, at about HK$1.64 billion, followed by Huayan Robotics, which expects up to HK$1.37 billion, with the public tranche oversubscribed by an estimated 6,868 times. Hangzhou Diagens aims to raise up to HK$900 million. More than 500 companies were in the Hong Kong stock exchange’s pipeline for listings as of Friday, according to bourse operator Hong Kong Exchanges and Clearing. IPO activity in Hong Kong was expected “to remain vibrant this year”, according to an EY report late last year. Hong Kong reclaimed the title as the world’s top listing venue last year, with a total of 114 companies raising US$37.22 billion. Some IPO hopefuls in the chock-full pipeline could face a hurdle after Beijing’s market regulator, the China Securities Regulatory Commission, issued guidance earlier this month restricting listings by so-called red-chip companies. Such firms, incorporated outside China but holding most of their assets and operations on the mainland, could not proceed with Hong Kong listings unless they first restructured and moved their corporate domiciles back to China, it said. However, the details of the curbs, including which types of companies would be covered and the cut-off dates for affected applications, were not yet defined.