Zijin Gold seeks $3.2 billion in Hong Kong IPO as demand for the precious metal soars

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Zijin Gold seeks .2 billion in Hong Kong IPO as demand for the precious metal soars — Zijin Gold seeks 32 billion in Hong Kong IPO as.jpeg

Investing in Gold has always been a popular choice for investors looking to capitalize on bullish sentiment for the precious metal. China’s Zijin Gold International is now looking to take advantage of this trend by launching a massive $3.2 billion IPO in Hong Kong, marking the city’s largest IPO in four years.

The offering, if successful, could raise as much as HK$28.7 billion ($3.7 billion) at a valuation of $24.6 billion, making it a significant event in the equity capital market. Gold, known for its performance during times of uncertainty and low-interest rate environments, has already seen a 39% increase in value this year.

According to David Blennerhassett, a strategist at Ballingal Investment Advisors, the $24 billion market cap for Zijin Gold is reasonable given the current bull market for gold plays. Momentum is strong, and there is strong support from long-only investors.

Zijin Gold, a subsidiary of China’s Zijin Mining, is set to sell 349 million shares at HK$71.59 each, with trading scheduled to begin on September 29. This IPO would be the largest in Hong Kong since JD Logistics’ $3.6 billion offering in May 2021.

The funds raised by Zijin Gold will be used to upgrade existing mines over the next five years. The company expects global gold demand to grow steadily at a compound annual growth rate of 3.2% from 2024 to 2030.

Cornerstone investors have already subscribed to approximately $1.6 billion worth of shares, with Singapore wealth fund GIC, private equity firm Hillhouse, asset managers BlackRock and Schroders, and industry peer Zhaojin Mining all committing to significant investments.

Morgan Stanley and CITIC Securities are serving as joint sponsors for the offering. Zijin Mining’s shares in Shenzhen and Hong Kong have already seen a slight increase in value following the announcement of the IPO.

With Hong Kong’s equity capital market experiencing a strong recovery and total funds raised from new listings exceeding previous years, Zijin Gold’s IPO is set to make a significant impact on the market. As the demand for Chinese AI and tech stocks continues to grow, more Chinese companies are looking to list in Hong Kong, further driving the city’s position as a leading financial hub in the region.