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SMIC disappoints in trading debut in HK and New York

Semiconductor Manufacturing International Corp (SMIC, 中芯國際集成電路), China's largest chipmaker, fell sharply yesterday on its first day of trading in Hong Kong after a disappointing debut in New York overnight.

SMIC's hugely anticipated initial public offering (IPO) -- worth US$1.8 billion -- ended its first day of trade on Hong Kong's main board at HK$2.475 (US$0.32), down 7.9 percent from its offer of HK$2.69.

The drop followed a poor debut in New York, where it fell to US$15.75 from an offer price of US$17.50 for its American Depositary Shares.

The company offered 5.15 billion shares, comprising 3.03 billion new shares and 2.12 billion existing shares, with 95 percent of those placed with overseas institutional investors and the remainder going to retail investors.

Delta Asia Financial Group analyst Conita Hung said she believed discrepancies between prospectus information and management boasts were to blame for the poor showing.

"It suggested that there was some inexperience in the management ... It raised doubts in the minds of investors," Hung said, referring to the fact that the company had to officially correct some comments about the business made by its chief financial officer.

The listing was the third largest in the world so far this year, behind US-based insurer Assurant and Shinsei Bank of Japan.

SMIC, founded in April 2000, offers a wide range of integrated wafer manufacturing services and is building a state of the art 300mm wafer plant in Beijing.
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