Midea IPO: China’s market regulator approves top appliance maker’s Hong Kong listing

Midea Group, the world’s biggest home appliances maker, has obtained approval from China’s market regulator for an overseas initial public offering (IPO), taking it a step closer towards a Hong Kong listing.

The company proposes to issue up to 650,848,633 ordinary shares on the Hong Kong stock exchange, according to a statement issued by the China Securities Regulatory Commission (CSRC) on Tuesday.

“If the overseas offering has not been completed within 12 months from the date of the notification of filing and is intended to be pursued, the filing information should be updated,” the statement said.

Last October, Midea submitted plans to list its shares in Hong Kong and had appointed China International Capital Corp and Bank of America as sponsors of the deal, according to a filing to the Hong Kong stock exchange.

The company, founded in Foshan in southern Guangdong province, was launched in 1968 by tycoon He Xiangjian, whose family is worth US$22.9 billion, according to Forbes. The group makes homeware, heating and ventilation devices, as well as air-conditioning systems.

It is the world’s biggest home appliances maker by market value and annual revenue, according to publicly available data. It has a market cap of HK$436 billion (US$55.8 billion), while revenue in 2023 stood at HK$373.7 billion. Midea’s board approved the H-share offering in September, the 10th anniversary of its stock listing in Shenzhen, according to a filing to the Shenzhen Stock Exchange.

The homeware maker opened its first overseas production plant in 2007 in Vietnam and has since accelerated its global expansion plans. It has more than 166,000 employees, over 30 global production centres and a presence in nearly 200 countries, including the US and the Middle East.

If the IPO raises US$1 billion, it would be the first billion-dollar IPO in Hong Kong since China Tourism Group Duty Free’s US$2.3 billion deal in August 2022.

China’s market regulator is working to further expedite approvals for offshore IPOs, which could lead to a wave of listings in Hong Kong.

The move comes as Chinese companies have been actively seeking overseas listings since the implementation of the overseas application system in March last year. As of June 18, 158 companies had obtained approvals for overseas listings, according to the vice-chairman of the CSRC. Among these, 85 are for Hong Kong offerings and 73 are for the US.

Fundraising in Hong Kong dropped by 35 per cent year on year to HK$11.6 billion in the first half of this year, according to KPMG. Deal volume fell 15 per cent to 27 new listings, and the average deal size plunged 25 per cent to HK$428 million.