Chinese Data Centre Company GDS Lists Above Offer Price After $1.67b Hong Kong Listing

Chinese data center company GDS Holdings Ltd. rose 3% from its offer price after raising $1.67 billion in its Hong Kong secondary listing, the latest US-traded mainland company to sell shares in the financial hub amid rising Sino-US tensions.

GDS shares opened at HK$81 on Monday, just above its offering price of HK$80.88, before climbing as high as HK$84. Shanghai-based GDS sold 160 million shares in its Hong Kong listing. Its Nasdaq-listed American depositary shares closed at $84.04 on Friday, which equates to about HK$81.5 with one GDS ADS representing 8 ordinary Hong Kong shares.

GDS is part of a growing cohort of U.S.-listed Chinese firms looking to sell shares in Hong Kong as part of efforts to expand the investor base. A Hong Kong listing also provides it with a hedge against any further deterioration in relations between Washington and Beijing.

Tensions between the two have spilled over into the capital markets, with the U.S. threatening to delist Chinese companies on the grounds that American regulators don’t have access to their audit papers.

More than $15 billion has been raised this year through such secondary listings in Hong Kong, among them the blockbuster deals by e-commerce giant JD.com Inc. and NetEase Inc., China’s second-largest gaming company.

GDS Chief Executive Officer William Huang said in a Bloomberg Television interview that the company plans to use the proceeds primarily to invest in data centers in China, Hong Kong, and possibly Southeast Asia. GDS might also look at M&A opportunities in China and beyond, Huang said.

JPMorgan Chase & Co., Bank of America Corp., China International Capital Corp. and Haitong International Securities Group Ltd. were joint sponsors of the listing.

Bloomberg