China home appliance maker Midea studying potential HK listing

Appliance and Electronics World Expo (AWE) in Shanghai

A Midea company sign is seen at the Appliance and Electronics World Expo (AWE) in Shanghai, China March 23, 2021. REUTERS/Aly Song/File Photo

Aug 10 (Reuters) – (This Aug. 9 story has been corrected to specify that Midea air conditioners’ ranking was by retail sales for home use, not the number of units sold, in paragraph 11)

Chinese home appliance maker Midea Group (000333.SZ) said on Wednesday it is studying a potential listing in Hong Kong as part of its global strategy.

The new shares to be issued would account for no more than 10% of enlarged capital, Midea, already listed in the Shenzhen stock exchange, said in a filing.

Bank of America (BAC.N) and China International Capital Corp (CICC) (3908.HK) are working on the deal, according to three sources with direct knowledge of the matter.

The sources could not be named as the information is not yet public.

Bank of America and CICC declined to comment.

Midea shares dropped as much as 3.6% to 55.5 yuan ($7.70) in morning trading on Thursday, hitting a two-month low.

Midea’s market capitalisation was $56.47 billion before the listing plan was made public, meaning a deal of up to 10% would be one of the largest listings in Hong Kong since 2021.

The company is looking to sell as much as 8% to 10%, one of the sources said.

Specific plans, including the timeline, remain uncertain, the company said in the Wednesday filing.

The initial filing to the Hong Kong Stock Exchange would be made this year, with a likely share sale sometime in 2024, one of the sources added.

Midea ranked first in retail sales of home-use air conditioners in China last year and second in retail sales of washing machines, the company said in its 2022 annual report, citing data from data provider All View Cloud.

The company said last month it was formulating a plan to spin off its logistics unit Annto and list it on the Shenzhen stock exchange in a bid to streamline the company’s managerial structure and expand Annto’s funding channels.

($1 = 7.2110 Chinese yuan renminbi)

Reporting by Scott Murdoch in Sydney, Roxanne Liu and Kane Wu; editing by Jason Neely and Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.

Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia and Australian M&A. He is based in Sydney.

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