(Yicai) Sept. 18 -- Midea Group raised HKD30.7 billion (USD3.9 billion) through its secondary listing, making it the Hong Kong Stock Exchange’s largest floatation in more than three years.

The new shares [HKG: 0300] surged 7.9 percent to close at HKD59.10 each in their trading debut yesterday, after the world’s largest maker of home appliances priced them at HKD54.80 (USD7.03), the upper end of the marketed range. The Foshan-based firm sold 566 million shares, and may exercise an over-allotment option to sell more to meet the strong demand.

The HKEX is closed today for China’s Mid-Autumn Festival. Trading resumed in Shenzhen after a two-day holiday, with Midea’s stock there [SHE: 000333] ending 2.7 percent higher at CNY65.25 (USD9.21).

Bonnie Chan, chief executive of Hong Kong Exchanges and Clearing hailed the “very positive momentum” for listings following Midea’s debut, the South China Morning Post reported.

The number of listings in Hong Kong fell 35 percent in the first half of this year from a year earlier, with the firms involved raising HKD11.6 billion between them, a 15 percent decline. But with global interest rates expected to start falling and Chinese regulators encouraging more of China’s firms to list in Hong Kong, market experts are more optimistic for the second half.

Eighteen cornerstone investors, including Chinese logistics giant Cosco Shipping and Swiss Bank UBS Group, subscribed to a total of 31.7 percent of Midea's newly issued shares, equal to nearly 2.4 percent of the company's total, according to the listing prospectus it filed on Sept. 16.

About 35 percent of the proceeds will be invested in upgrading Midea's intelligent manufacturing system and supply chain management, and another 35 percent will be used to enhance the company's global distribution channels and sales network. Around 20 percent will be allocated to the firm's global research and development initiatives, and the rest will go to general corporate purposes.

A key objective of Midea's secondary listing is to raise funds for overseas expansion and increase brand awareness. Even though revenue from foreign markets accounted for 40.9 percent of Midea's total in the first half of the year, the company still needs to strengthen its positioning in developed markets, such as North America and Europe.

Midea's executives previously said the firm's current share in the global home appliance market is less than 5 percent.

Midea's kitchen appliance plant in India, household air conditioner factory in Indonesia, refrigerator and washing machine production hub in Brazil, and heat pump facility in Italy are expected to come on stream by the end of the year, according to the company’s plans.

Moreover, Midea's refrigerator and washing machine plant in Indonesia and fridge and commercial air-con factories in Thailand will kick off production next year, while its washing machine production base in Egypt is expected to become operational in 2026.

Midea also plans to recruit 1,000 to 1,500 R&D staffers globally over the next one to three years to expand its global R&D network, as well as invest in or acquire overseas assets related to its smart home, commercial, and industrial solution businesses.

Editor: Futura Costaglione