Pedestrians pass in front of Yum! Brands Shanghai, China
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SINGAPORE – Yum China shares started trading in Hong Kong on Thursday, but lost more than 4% at the start of trading.
Yum China, which operates fast food restaurants KFC, Taco Bell, and Pizza Hut in China, raised $ 2.22 billion by selling 41
The company has been listed in New York since 2016.
Yum China’s Hong Kong debut comes after the secondary listings of gaming giant NetEase and e-commerce company JD.com, which raised Hong Kong dollars ($ 2.7 billion) and $ 21.09 billion, respectively. 30.05 billion Hong Kong dollars ($ 3.87 billion).
The string of mega deals marks what has been a hot year for listings in Hong Kong. US-listed Chinese companies have poured into the city for their secondary listings amid mounting tensions between the US and China. The US Senate passed a bill in June that could essentially ban many Chinese companies from going public on US stock exchanges.
R.J. Hottovy, a commodity research strategist at Morningstar, suggested that the stock’s initial decline could indicate that investors see problems with the company itself, rather than IPO fatigue.
“It’s clear not everyone agrees to invest in that space right now … frankly there’s a lot of uncertainty with Covid,” he told CNBC Thursday. “Are people going to dine out less … embrace online shopping? … The question is definitely what I think is probably the biggest concern.”
But overall, Hottovy pointed out that the company has had “quite impressive growth”.
“I think Yum China is doing quite well. I think there may be an opportunity. We see these stocks as slightly undervalued at this point,” he said.