By Ambar Warrick
Investing.com-- Shares of Onewo Inc (HK:2602), the property management unit of China Vanke Co Ltd (HK:2202), tumbled in their Hong Kong debut amid weak risk appetite and overall aversion to China-exposed property stocks.
Shares of the firm dropped as much as 7.6% to HK$45.45, after being priced at $49.35 each- the mid-point of the targeted share price in the initial public offering. China Vanke's Hong Kong shares traded 0.3% higher.
Onewo raised around HK$5.8 billion ($739 million) in the IPO, which was largely undersubscribed by local traders as weakening risk appetite kept them wary of new market entrants.
The firm was targeting to raise as much as $784 million.
The IPO, one of Hong Kong’s largest this year, also comes amid trying times for the Chinese property market. The sector, which was once a cornerstone of Chinese economic growth, is now suffering from a surge in debt defaults by major players.
Chinese property bonds and stocks have plummeted this year amid growing concerns over sustainable growth in the space.
While Onewo owner China Vanke has set itself apart by being one of the few real estate players to retain profit growth, overall scrutiny of the sector has kept investors at bay.
Onewo offers property management services that incorporate artificial intelligence and business process outsourcing models. Vanke holds roughly 60% of the firm after the IPO.
Another major Hong Kong IPO, electric vehicle maker Zhejiang Leapmotor Technology Co Ltd (HK:9863), also stumbled in its debut on Thursday. Shares of the firm slumped over 20% to as low as HK$32.20.
Broader Hong Kong markets rose, with the Hang Seng index rising 1.3% from a 11-year low. But sentiment remained on edge as investors feared rising U.S. interest rates and a potential slowdown in the global economy this year.