Chinese Copper Recycler Shares Fall 13% in Hong Kong DebutMichelle Yun and Fox Hu
China Metal Resources Utilization Ltd., a Chinese copper recycler, slumped 13 percent in its trading debut in Hong Kong.
China Metal dropped 15 cents to 98 Hong Kong cents at the close of trade, from its offer price of HK$1.13, making it the city’s fourth-worst debut in the past year, according to data compiled by Bloomberg. The company said yesterday it raised HK$546.9 million ($70.5 million) in net proceeds from the initial public offering.
China Metal has a market value of HK$2.06 billion. Gushan Environmental Energy Ltd., a former version of China Metal, was privatized in October 2012 at an equity value of $10.6 million, data compiled by Bloomberg show.
Yu Jianqiu, founder and chairman of China Metal, de-listed Gushan because trading volume of its American depositary receipts was limited, according to China Metal’s IPO prospectus. Gushan was also warned on two occasions that it didn’t meet listing requirements due to a low trading price and market capitalization.
Companies and their investors have raised $3.7 billion through IPOs in Hong Kong this year, more than four times the value for the same period of 2013, data compiled by Bloomberg show. With IPO sizes weighted, the new stocks have fallen on average 0.5 percent from their offer prices, according to the data.
Gushan was the largest biodiesel producer in China in 2006, according to China Metal’s prospectus. It acquired a copper recycling company in November 2010, manufacturing facilities in 2011, and copper cable businesses in 2012.