Japanese-style restaurant chain operator Daikiya Group Holdings has officially backed out of its planned initial public offering (IPO) in Hong Kong. The company was originally planned to be listed on the Hong Kong Stock Exchange on Friday this week.
According to its filing with the Hong Kong exchange on Wednesday, Daikiya decided not to proceed with its share offering in the city due to several factors. The factors mentioned by the company included the unfavorable market conditions in the city.
The company assured its investors that those who have already subscribed to its shares will be refunded in full. Daikiya did not specify whether the decision was a postponement of its planned IPO. The company also did not mention a specific future date.
Daikiya currently operates 15 restaurants in Hong Kong, comprised of 13 Japanese eat-all-you-can restaurants and 2 a-la-carte eateries. The company holds a substantial 37 percent market share in the city's all-you-can-eat cuisine segment.
Daikiya was one of 22 other companies that announced their planned IPOs as part of the influx of proposed listing following the easement of social unrest in the city. The company was planning to sell 100 million shares during its IPO, with each share priced at a range of HK$1.60 to HK$2.00 per piece. The IPO would have raised up to HK$200 million, or roughly $25.7 million, for the company at the top of its price range.
China Hong Kong Capital Asset Management CEO, Kenny Tang Sing-Hing, mentioned that the postponement of IPOs in Hong Kong will likely only be temporary and most will probably restore their plans.
The current coronavirus epidemic in the country has essentially halted essential businesses, such as professional services firms and financial printers, making it difficult for companies to conduct press conferences and roadshows at this time. Due to the current situation, some companies may not be able to meet their planned IPO timelines.
Daikiya withdrawal will be putting added pressure on Hong Kong as it continues to see would-be public companies back out from their plans given the current predicament. Analysts have already predicted a cloudy outlook for the city's equity capital market, threatening its position as the world's top destination for the third consecutive year.
Fortunately, other companies have chosen to move ahead with their listing in Hong Kong despite the current situation. Macau-based electrical engineering company SEM Holdings is expected to move ahead with its Hong Kong IPO on Friday as previously planned.
