Chinese AC & Heat Tech Company Plans $1 Billion IPO in Hong Kong
The company has entered into cornerstone investor agreements for as much as 57.7% of the shares on offer
Key Points
- Zhejiang Sanhua plans a US$1 billion secondary listing in Hong Kong.
- Sanhua will offer 360.33M shares, priced between HK$21.21-HK$22.53, with trading starting June 23.
- Cornerstone investors, including Schroders & GIC, have agreed to purchase up to 57.7% of the offered shares.
China’s Zhejiang Sanhua Intelligent Controls 002050 -2.59%decrease; red down pointing triangle, a maker of refrigeration components, is planning a US$1 billion secondary listing in Hong Kong, underpinning the revival of the city’s IPO market.
The supplier of air conditioning and refrigeration parts is looking to raise up to 8.12 billion Hong Kong dollars, equivalent to US$1.03 billion.
China-listed Sanhua said in a filing that it aims to sell 360.33 million shares for HK$21.21 to HK$22.53 each. It expects to start trading in Hong Kong from June 23.
The company has entered into cornerstone investor agreements for as much as 57.7% of the shares on offer, depending on offer size adjustments, overallotment options and final pricing. Investors include U.K. asset manager Schroders, Singapore wealth fund GIC, and ICBC Wealth Management.
Sanhua’s shares were down 2.3% Friday morning in Shenzhen, where it went public in 2005. The stock is up 8.6% so far this year.
A flurry of Chinese companies have sought secondary listings in Hong Kong in recent quarters, driving a rebound in activity.
In the first half of 2025, Hong Kong IPOs and spin offs of China-listed companies boosted average listing proceeds over fivefold from a year earlier, according to an EY report. EY said the number of IPO deals has risen 33% so far this year.
In May, Chinese battery giant Contemporary Amperex Technology raised over US$4.6 billion in what was then the biggest IPO of the year. Chinese drugmaker Jiangsu Hengrui Pharmaceuticals followed with an offering that raised about US$1.25 billion.
Sanhua, whose components are used for cold-chain transport, heat pump systems and home appliances, said it would use the proceeds for research-and-development, product innovation and growing overseas production.
Though the company exports to various markets, it doesn’t expect additional U.S. tariffs to significantly hurt its business or expansion plans.
Sanhua’s products are subject to U.S. tariffs on shipments heading to America from China, Mexico and Vietnam, where it has factories.
“However, there continue to be significant uncertainties around changes to U.S. trade policies,” it said.
As of end-December 2024, Sanhua had around 48 factories worldwide, including in the U.S., where it also has two R&D bases.
CICC and BOCI are among the banks advising Sanhua on its IPO.