SPAC Hong Kong listing enthusiastically!The big banks and Chinese brokerages also benefited from the presence of celebrities such as Fred Hu, Li Ning and David Wei

2022-06-06 0 By

Capital and celebrities are pouring into this sector of the Hong Kong stock market.On February 15, Vision Deal, the sixth SPAC company, applied for listing in HKEX.Just a day earlier, A SPAC company called Ace Eight had completed its delivery.A number of SPAC companies were planning ipos in Hong Kong at the end of January.The SPAC listing mechanism is a major reform system announced by HKEX on January 1, 2022.The Hong Kong SPAC business is in a warm-up phase, and potential promoters and investors are also watching SPAC’s post-listing performance, people interviewed told the brokerage’s China correspondent.Among the six SPAC sponsors, well-known investment institutions, large financial companies and industrial capital can be seen, such as Primavera Capital, Li Ning, Tige Pharmaceutical, And Imperial Household.Former Alibaba CEO David Wei and former Tencent Music co-president Dhanin Dhanin are also involved.It also presents opportunities for investment banking for brokerages in Hong Kong, with those with strong assets and experience operating SPAC among the first to benefit.According to the securities China reporters sorted out the six SPAC projects that have been declared, the performance of foreign big banks and Chinese institutions is equal, and Chinese institutions are dominated by banks.On February 15th Vision Deal filed a form with the Hong Kong Stock Exchange to list on the main board, explicitly describing itself as a “special purpose acquisition company” (SPAC).The company was founded by Wei Zhe, former Chief executive of Alibaba, DealGlobe, a unit of Yijie Group, Lou Lishu and Chuifu Finance, according to the prospectus.SPAC (Special Purpose Acquisition Company).Typically, these companies have only cash and no business, and are set up to acquire a promising unlisted company within a predetermined period of time after listing, using funds raised to finance and list the company.If the acquisition is not completed within the specified time, investors will get their capital back plus some interest.According to the Vision Deal prospectus, the company plans to identify and complete acquisitions with quality Chinese companies.In terms of industry, the target of m&a should be engaged in intelligent vehicle technology;Or have supply chain and cross-border e-commerce capabilities to benefit from the upgrading trend of domestic consumption.The SPAC IPO is the sixth application the HKEx has received since the launch of the system on January 1.In fact, many people have expressed interest in the SPAC listing mechanism to hKEx, including many SPAC issuers and intermediaries, Chen Yiting, head of listing at hKEx, said at the end of 2021.The Vision Deal filing came a day after A SPAC company called Ace Eight filed to list on the Hong Kong Stock Exchange.It plans to look for and complete acquisitions with companies in the biotechnology or TMT sectors, mainly in Asia and particularly In China.The Promoter of the company is ACE Promoter and Assos Omada Promoter. Zhongyi Furniture co., LTD., one of the shareholders of the former company, is an indirect wholly owned subsidiary of Hong Kong listed company Imperial Household co., LTD.Earlier, in January, the HKEx had already received IPO filings from four SPAC companies: Aquila, Tiger Jade, Trinity and Interra.The sponsors of the above four enterprises are large financial institutions, such as China Merchants International and Bank of Rural China International.Well-known investment institutions, such as Primavera Capital;There are industrial capital such as Tiger Medicine, and sports celebrities – Li Ning.A market source told reporters in China that Hong Kong SPAC business is in the warm-up stage, the recent SPAC project has completed A 1 application, has not yet reached the stage of issuance, potential promoters and investors are also paying attention to the performance of SPAC after listing.The Hong Kong SPAC will be an important addition to the IPO financing vehicle, providing more diversified options for companies and investors, the market player said.With the introduction of THE SPAC listing mechanism by the Hong Kong Stock Exchange, investment banks in Hong Kong are expected to actively seize this business opportunity.According to the statistics of 6 SPAC project sponsors who have submitted the form by the Chinese securities broker, foreign big banks and Chinese institutions share the same position in this business, with 5 and 4 respectively.Specifically, JP Morgan participated in the sponsor SPAC project the most, a total of 2 orders.At present, Chinese institutions are mainly banks and investment banks, including ABC International, China Merchants International and Min Bank Capital, while Chinese securities firms are Haitong International.According to the minimum requirement of HK $1 billion in SPAC financing, brokers with large overseas assets and operating licenses in Hong Kong will be the first to benefit.Secondly, they participate in many overseas investment and financing businesses and have strong research ability at home and abroad. The advantages of securities firms with strong pricing ability at home and abroad for spAC-IPO enterprises will become more prominent.Wang Jing, managing director of THE investment banking Department of CICC, said in an interview with the Chinese reporters of the brokerage that the development of SPAC business requires intermediaries to have a high degree of professional ability, all-round business coverage ability, multinational and cross-market multi-regional teams, and a deep understanding of the capital market and SPAC products.As well as the accurate grasp of THE demands of SPAC companies, companies to be listed and market investors.In his opinion, for Chinese brokerages, the first test is their international business level. At present, SPAC business is mainly concentrated in the United States, Singapore, Hong Kong and other places, requiring Chinese brokerages to have certain cross-border cooperation ability.Secondly, the ability of merger and acquisition, because SPAC business is more similar to merger and acquisition business in the business merger stage, compared with traditional IPO, there are more commercial negotiations and matching links;Moreover, the SPAC business demands investment banks’ investor reach and influence.According to relevant regulations, Hong Kong SPAC must PIPE investment in the business merger stage, which requires brokers to fully mobilize resources to introduce high-quality investors.It is understood that cicC set up an SPAC team in 2019, whose members are SPAC experts from mainland China, Hong Kong, Singapore, the United States and other places.Another Chinese institution said it has been following the SPAC’s regulatory developments since hKEx solicited comments from the SPAC last year.”According to our contacts, investment institutions are optimistic about hKEx’s SPAC listing mechanism.We also have a reserve of related projects that will be released in the future.”Editor: GUI Yanmin