Despite encouraging signs of a resurgence, Hong Kong’s largest IPO this year failed last week, signaling the market still needs time to recover. Although ZJLD Group, a Chinese liquor business backed by KKR & Co., saw its shares drop about 18% on their first day of trade on April 27, the offering raised $675.2 million.
Ringo Choi, Asia-Pacific IPO leader at EY, told CNBC that “the sentiment in the IPO markets has not yet built up.” According to Choi, “a lot of industries are struggling right now,” noting that among other difficulties, tech companies are under pressure from rising U.S.-China tensions and lowering electric vehicle prices. “Valuations currently have not increased as much as they did two to three years ago. We still require some time, “