(Yicai) Sept. 9 -- Midea Group is taking investor orders for a secondary listing in Hong Kong that could see the Chinese white goods manufacturer raise up to HKD27 billion (USD3.5 billion), in what would be the Hong Kong stock exchange’s biggest listing this year.

Midea is issuing 492.1 million shares, or 6.6 percent of its total share capital, worldwide from today until Sept. 12 in the run up to the stock going public on the Hong Kong bourse on Sept. 17, the company said in its prospectus released today.

Priced at between HKD52 (USD6.67) and HKD54.80 per share, this is an around 20 percent discount on the closing price of the Foshan-based firm’s stock in Shenzhen today.

Eighteen cornerstone investors have subscribed to around USD1.3 billion worth of shares, led by Chinese shipping giant COSCO Shipping at USD281.2 million, Swiss bank UBS with USD100 million and Golden Link, owned by Chinese new energy vehicle giant BYD, at USD99 million.

Twenty percent of the proceeds will be spent on research and development, 35 percent will go towards upgrading the firm's smart manufacturing and supply chain management systems and another 35 percent will be used to enhance its global distribution channels and sales network, according to the prospectus. The rest will be used to supplement working capital.

The new share sale will dilute founder He Xiangjian’s holdings to approximately 28 percent from 30 percent but he will remain the largest shareholder. 

Midea is the world’s largest manufacturer of home appliances in terms of turnover and last year logged global sales of CNY373.7 billion (USD52.6 billion), 40 percent of which came from overseas markets, according to its prospectus.

In the first half, Midea’s net profit soared 14 percent from the same period last year to CNY20.8 billion (USD2.9 billion), while revenue jumped 10 percent to CNY218.1 billion, according to the company's latest financial report.

Midea’s Shenzhen-traded shares [SHE:000333] closed down 3 percent at CNY61.09 (USD8.60) today.

Editor: Kim Taylor