Cirrus Aircraft prices its stock midrange at HK$27.50 as pace of Hong Kong’s IPOs picks up

An aircraft assembler has priced its stock at the middle of a range in Hong Kong, becoming the first company of its kind to raise capital on the local exchange, as the city’s pace of fundraising picks up from a three-year slump.

Cirrus Aircraft, the Minnesota-based assembler of light planes that has been owned since 2011 by China Aviation Industry General Aircraft (Caiga), will offer its shares at HK$27.50 (US$3.52) apiece, Reuters reported, citing a source with direct knowledge of the matter.

Cirrus raised HK$1.5 billion by selling 54.87 million shares, about 15 per cent of its stock. Its cornerstone investors, including a Chinese state-owned enterprise restructuring fund, bought HK$851 million of the offering, according to regulatory filings. The stock, listed under the code 2507, will trade for the first time on Friday.

The company was set up four decades ago by the Klapmeier brothers to produce the VK-30 kit aircraft. That model was followed by the four-seat, SR20 and SR22 single-propeller planes, among the bestselling products in the segment in the past 20 years, according to the General Aviation Manufacturers Association (Gama). The SR2X series contributed to more than half of the company’s revenue in 2023, Cirrus said.

Cirrus’ Vision SF50, a US$7 million single-engine jet plane, is the dominant model for light aircraft that can accommodate seven occupants.

Worldwide delivery of personal aircraft rose by 15 per cent to 2,215 units in 2023, from 2021, because of the recovery from the pandemic and consumers’ preference for premium travel, Frost & Sullivan said.

The US consultancy shows that Cirrus is the leading company in the global private aircraft market. It took over 32 per cent of the market in deliveries and 24.9 per cent in market share.

The company laid off staff and had to struggle to ward off bankruptcy in the aftermath of the 2008 global financial crisis, after two decades of success. It was sold in 2011 for US$210 million to Caiga, a unit of China’s state-owned Aviation Industry Corporation.

Cirrus’ net profit rose 3.5 per cent last year to US$91 million, while sales jumped by 19.4 per cent, according to its filing to the Hong Kong stock exchange.