Shares of China's second largest chip foundry Hua Hong jump 13% in Shanghai debut

Shares of Chinese chipmaker Hua Hong jumped 13% astatine the unfastened during its marketplace debut connected Shanghai Stock Exchange's Star Market connected Monday, but rapidly gave up gains.

Hua Hong is China's second-largest spot foundry aft Semiconductor Manufacturing International Corp. (SMIC). Hua Hong's archetypal nationalist offering is the largest 1 successful Mainland China truthful acold this year, according to EY's planetary IPO report.

Shares of the chipmaker opened connected the Nasdaq-style Star Market astatine 58.88 Chinese yuan, according to Refinitiv data. That's a 13.2% leap from its connection terms of 52 Chinese yuan ($7.23).

The Shanghai-listed shares person since pared gains and were trading little astatine 53.99 Chinese yuan connected Monday afternoon.

The company, which produces semiconductors utilizing precocious wafer process technologies, antecedently said that it volition merchantability 407.75 million shares at a terms of 52 Chinese yuan per share, according to a filing. That represents 21.2 cardinal yuan ($2.95 billion) raised.

Chips produced by the Shanghai-based institution are utilized successful industries spanning user electronics, communications, computing, concern and automotive.

Hua Hong has been listed successful the Hong Kong speech since 2014. Its Hong Kong-listed shares plummeted arsenic overmuch arsenic 7.4% connected Monday.

Phelix Lee, equity expert astatine Morningstar Asia, said the size of Hua Hong's IPO is not significant.

"I don't deliberation it's a large woody successful the expansive strategy of things arsenic the woody size is smaller than SMIC's IPO 2 oregon 3 years ago," said Lee. "The inclination of encouraging section chipmakers and different semi-related companies to database domestically is intact and we presumption determination are much semiconductor IPOs to come."

SMIC raised 46.28 cardinal yuan ($6.62 billion) during its IPO successful 2020.

Hua Hong's listing comes arsenic Chinese companies question to rise superior to ramp up connected precocious spot tech arsenic China seeks aforesaid reliance connected precocious spot tech amid Washington's efforts to chopped Beijing disconnected from precocious spot tech.