HONG KONG, Feb. 5 (Xinhua) -- Video sharing app Kuaishou Technology surged sharply Friday on its Hong Kong market debut after setting a record as the most oversubscribed stock in the global financial hub.
Market observers here said Kuaishou's rallying reflected investors' confidence in the mainland economy, especially the emerging sectors. It also came as Hong Kong's capital market remained resilient amid the COVID-19 pandemic, and Hong Kong's role as a global fund-raising hub is being consolidated.
Shares of Kuaishou opened at 338 Hong Kong dollars (about 43.6 U.S. dollars) in the morning session, up significantly from its offer price of 115 Hong Kong dollars (14.8 dollars).
As the first short-video platform going public in Hong Kong, Kuaishou is expected to raise about 41.28 billion Hong Kong dollars through its initial public offering (IPO), the highest since November 2019 when Alibaba's secondary listing topped 100 billion Hong Kong dollars.
The public offering was oversubscribed more than 1,200 times by local investors, locking up capital of about 1.28 trillion Hong Kong dollars, and nearly 40 times by international buyers.
"It (Kuaishou) is the first short-video platform to go public in the world. Innovative, rapidly-growing businesses like Kuaishou from the mainland are extremely attractive to investors," said Yang Yuchuan, a professor with the Hong Kong Financial Services Institute.
Kuaishou is the world's second largest short-video platform with 305 million average daily active users over the first nine months of 2020.
With a majority of revenues coming from live streaming business, the company raked in 20.3 billion yuan (about 3.14 billion U.S. dollars) in 2018, 39.1 billion yuan in 2019, and 40.7 billion yuan in the first nine months of 2020.
According to Kuaishou's prospectus, the funds raised in the IPO will be used for incentives for users to create content in the app, development of its e-commerce marketplace, investment in technologies such as artificial intelligence and big data, and possible acquisitions of businesses in social entertainment and software, among others.
Kuaishou's mega listing in Hong Kong came amid a robust stock market as the benchmark Hang Seng Index in January surpassed the 30,000-point mark and total daily turnover also hit a new high.
As new IPOs keep coming and the market remains bullish, analysts believe Hong Kong is reinforcing its position as a top fund-raising center and a global financial hub despite the impact of COVID-19.
Hong Kong's capital markets remained resilient despite challenges last year and in many ways came out of 2020 stronger than ever, Laura Cha Shih May-lung, chairperson of Hong Kong Exchanges and Clearing Limited (HKEX), told an online forum in January.
"Hong Kong's role as an international financial center connecting mainland ... and the rest of the world will be more relevant than ever despite significant market volatility around the globe," she said.
IPO equity funds raised in Hong Kong last year stood at 51.28 billion U.S. dollars, up 26.5 percent from 2019, according to an annual report of the HKEX. The bourse was ranked as the world's second largest IPO market only after Nasdaq in 2020.
Altogether 154 businesses such as tech leaders JD.com and NetEase went public in Hong Kong last year, taking the total number of stocks listed on the HKEX to 2,538.
Liao Qun, chief economist of the China CITIC Bank International, said investors' enthusiasm for Kuaishou reflects the widespread optimism about the mainland economy, in particular the emerging sectors.
"While the southbound capital and mainland businesses bring new vitality to the market, Hong Kong should also (seize the opportunity) and more actively transform towards the new economy," he said. (1 U.S. dollar equals 7.75 HK dollars or 6.471 yuan)