Shenzhen-based fintech Linklogis Inc. began publicly trading Friday, with shares in the Tencent-backed logistics company gaining 9.9% after pricing its $1.02 billion listing at HK$17.58 ($2.26) each.
The offering's retail portion was oversubscribed nearly 99 times by Hong Kong market participants keen to buy into a company describing itself as "a key member of Tencent's strategic ecosystem."
The proceeds will be spent on research and development, acquisitions and cross-border operations, according to Linklogis' prospectus.
A portion will likely help pay for the company's digital wholesale bank project in Singapore in cooperation with a consortium of other companies including Greenland Financial Holdings and mainland-based Equity Investment Fund Management Co.
Last year, the group received approval from the Singapore Monetary Authority to build a supply chain financing service. The wholesale-focused bank is scheduled to launch in 2022 and will open up a new revenue stream for the newly listed Chinese financial technology company.
"Linklogis' ownership share of the Singapore digital banking license might be worth billions of dollars," according to LightStream Research analyst Oshadhi Kumarasiri.
Linklogis received cornerstone investments from BlackRock, Inc., Sequoia Funds and Fidelity Investments Inc. while Goldman Sachs Group, Inc., Citigroup Inc. and China International Capital Corp. Ltd. were advisers in a listing that comes as a welcome change from the spate of Hong Kong initial-public-offering flops in recent weeks.
Shares in mainland video streaming service Bilibili briefly fell 6.8% below their initial public offering pricing after listing in March while artificial intelligence company Bairong dipped 16% in its first day of trading last week.
In contrast, Linklogis sold 452.8 million shares at the upper end of the price range.
"We do like Linklogis' long-term prospects and would consider building a position once the initial post-public offering volatility subsides," Kumarasiri said.