Zijin Gold International, a fully owned subsidiary of China’s Zijin Mining, has announced its intent to raise HK$24.98 billion (approximately US$3.21 billion) through an initial public offering (IPO). This IPO is set to be the second largest in Hong Kong this year, trailing only behind the US$5.24 billion offering of Contemporary Amperex Technology, the leading manufacturer of battery packs for electric vehicles.
The company has initiated the sale of 349 million shares priced at HK$71.59 each, with the offering period commencing on Friday and concluding at noon on Wednesday, as outlined in its prospectus. Post-IPO, Zijin Mining is expected to retain an 86.7 percent stake in Zijin Gold, a figure that will dip to 85 percent should an overallotment option—allowing for a 15 percent increase in the offering—be exercised. Notably, 10 percent of the shares will be made available for retail investors, while the remainder is earmarked for international investors.
The backdrop for this IPO is characterized by a robust surge in gold prices, which have risen nearly 40 percent in 2023, reaching US$3,682 per ounce as of Friday. This increase has drawn considerable interest from global investors and central banks, who are flocking to safe-haven assets amid ongoing trade uncertainties. Kenny Ng Lai-yin, a strategist at Everbright Securities International, commented, “The IPO of Zijin Gold comes as the gold price has kept breaking records, and many Hong Kong-listed gold-related stocks have performed strongly this year.” He anticipates high demand from both international and local retail investors.
The offering has already garnered significant interest from institutional players, with 29 cornerstone investors committing to a total of HK$12.47 billion in shares, effectively accounting for about 50 percent of the offering under the new allotment rule instituted last month. Prominent among these cornerstone investors are Singapore’s GIC and private equity firm Hillhouse, each planning to purchase US$150 million worth of shares. Additionally, fund management giants BlackRock and Schroders are set to invest US$120 million each.
As the IPO unfolds, it remains clear that Zijin Gold International is positioning itself to capitalize on the rising gold market, anticipating a favorable reception from investors eager to tap into the growing demand for gold amid global economic fluctuations.
