(CapitalWatch, July 18, New York) Newly-listed unicorn AMTD Digital Inc. (NYSE: HKD) skyrocketed nearly 72% Monday on Day Two of its public trading on Wall Street, multiplying the gains from Day One.
The Hong Kong-based digital solutions spin-off of AMTD Group celebrated its $125 million IPO on Friday, about a year later than it was first scheduled to float. The company sold 16 million American depositary shares at $7.80 per share, within the expected range of $6.80 to $8.20.
On Day One, HKD stock more than doubled to $16.21 per share. On Monday, shares in AMTD Digital surged an additional $11.59 to $27.80 per share, signaling the U.S. investors' continued strong interest for solid Asia stocks. AMTD Global Markets secured the deal.
The IPO marked the seventh China-related IPO in New York this year and the biggest one. Only over the past two months have U.S.-China listings picked up, and these were all IPOs worth under $40 million. Just last week, three companies' stocks made it to a U.S. listing.
A year ago at this time, Beijing had launched a review of its overseas listing laws, shelving many IPOs, including that of AMTD Digital.
But while many Chinese companies gave up on their U.S. listing plans and turned to Hong Kong, others had kept their filings up-to-date. AMTD Digital and hotel operator Atour Lifestyle have been among the bigger applicants that have continued to pursue their U.S. trading plans. Beijing's recent shift to a more supportive stance for overseas fundraisings had raised the curtain – and the IPOs had picked up.
Meanwhile, there's no lack of candidates – as Renaissance Capital pointed out, a third of U.S. IPO applicants of the past three months were Chinese firms.
At the same time, concerns remain when it comes to bigger U.S.-China IPOs. Matthew Kennedy, senior strategist at Renaissance Capital, noted the continued uncertainty, citing the Beijing regulators' "forceful encouragement" with Didi Global (OTC: DIDIY), as well as the U.S. PCAOB auditing checks under the HFCAA.
Kennedy also pointed out the recent sell-off and high volatility in the U.S. markets, as well as the bad returns on Chinese stocks.
AMTD Digital is based in Hong Kong and stated that it does "not have any material operation or maintain any office or personnel in Mainland China nor do we have any variable interest entities structure in place." However, should China's laws on "variable interest entities, data and cyberspace security, and anti-monopoly concerns" become applicable, AMTD Digital would face risks and uncertainties, it said.
The company does not have a VIE structure, but is an offshore holding with operating subsidiaries. Its Digital Financial Services business includes AMTD Risk Solutions – the largest corporate insurance solution provider in Hong Kong, PolicyPal for providing digital insurance to consumers and SMEs, Singa Bank for digital banking to businesses, Applaud, which is working towards obtaining a direct insurer license, and CapBridge, a Singapore-based venture capital firm.
AMTD Digital also operates SpiderNet Ecosystem Solutions, a platform connecting entrepreneurs and corporations, and a Digital Media, Content, and Marketing unit, through which it creates and promotes digital solutions content. It also operates a Digital Investments branch, whose portfolio includes Appier, DayDayCook, and WeDoctor.