Hua Hong edges toward $2.6 bln listing, China's biggest of 2023 (updated)

Hua Hong Grace Semiconductor

18/05/2023 06:27

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      Hong Kong-listed chipmaker plans Shanghai raising
    

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      Shares rise as much as 10.7%
    

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      Will use funds to upgrade and expand production
    

  
 (Adds share price jump, details of company plans, other
listings)
    By Samuel Shen and Josh Horwitz
       SHANGHAI, May 18 (Reuters) - China's second-largest chip
foundry, Hua Hong Semiconductor Ltd  1347.HK , said it had
received Shanghai Stock Exchange approval for a planned public
share sale worth $2.6 billion, which would be the year's biggest
mainland listing so far.
        The plan, which still requires a green light from the
securities watchdog, comes amid a capital raising rush by
Chinese chipmakers as Beijing seeks self-sufficiency in an
escalating technology war with Washington. 
        Hua Hong in November applied for a dual listing on
Shanghai's tech-focused STAR Market, aiming to raise 18 billion
yuan ($2.60 billion) to upgrade and expand production. 
        The Shanghai-based chipmaker said late on Wednesday that
its application had been approved by the bourse's listing
committee,  sending its Hong Kong-listed shares up as much as
10.7% on Thursday.
        A share sale still requires registration at the China
Securities Regulatory Commission (CSRC), it added. 
    Hua Hong's share listing would be China's biggest this year,
dwarfing the $1.67 billion initial public offering (IPO) by
another chipmaker, Nexchip Semiconductor Corp  688249.SS ,
according to Refinitiv data.
    The fundraising would "fuel a new round of capacity
expansion" by Hua Hong, Guosen Securities said in a report.
        Hua Hong, which saw revenue jump 52% in 2022 to a record
$2.5 billion, has said it will increase capacity at its 12-inch
production line in Wuxi this year and will start to build new
lines.   
    More than a dozen Chinese chipmakers, including Lontium
Semiconductor Corp  688486.SS  and Skyverse Technology Co
 688361.SS , have sold shares publicly on the mainland this year
as the government guides capital into a sector crucial in its
competition with the United States.
    Washington has introduced sweeping export restrictions to
limit China's access to advanced chipmaking technology and
tools.
        This has made it harder for Hua Hong and Chinese
champion Semiconductor Manufacturing International Corp
 688981.SS   0981.HK  to catch up with overseas rivals such as
Taiwan Semiconductor Manufacturing Co.
    Chinese investors have been ploughing money into chipmaking
stocks. An index tracking the domestic sector  .CSI931865  has
jumped 17% since Jan. 1, far outperforming the benchmark CSI300
Index  .CSI300 , which gained less than 3%. 
($1 = 6.9121 Chinese yuan renminbi)

 (Reporting by Samuel Shen and Josh Horwitz; Editing by Jamie
Freed)
 ((samuel.shen@thomsonreuters.com;  +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))