Why did China’s Zijin Gold soar in its Hong Kong debut?

CGTN Europe

CGTN Europe interviewed Fiona Cincotta, Analyst, City Index

Transcript

00:00China's Tsaijin Gold International has served in its Hong Kong debut, raising $3.2 billion

00:07to become the world's largest IPO of the year so far.

00:11A firm which bears a division at Tsaijin Mining operates gold wines outside of China.

00:16The rotation came after gold prices hit another record, having risen more than 10% just since

00:21the start of September.

00:24Well, let's bring in Fiona Sincolta, who's an analyst at brokerage firm Citi Index.

00:29Fiona, thank you for joining me.

00:30What do you think has fueled such a strong performance today?

00:36Yes, I mean, this really was an impressive performance.

00:39You know, it's one of the best performing IPOs on the Hong Kong exchange this year, but

00:43even this decade, we saw the retail tranche as well as the institutional tranche to the

00:49IPO very oversubscribed.

00:51And I think this is a combination of, or a perfect combination, should I say, of timing

00:56and sentiment.

00:57So, obviously, gold is trading at record highs.

01:01But at the same time, we're also seeing this September fundraising boom in the Hong Kong

01:06exchange.

01:11More than 40% this year hitting record highs.

01:14So, obviously, that's going to translate into Tsaijin Gold's success, isn't it?

01:18But is it just to do with the fact that the price of gold has gone up?

01:22Or are there other factors coming to play as well?

01:25So, yeah.

01:26You know, the gold story is very much a strong factor here.

01:30Not only is it trading up at record highs, but the outlook for gold remains strong, with

01:34the Federal Reserve expected to continue cutting rates and central banks still buying.

01:39But there are other structural factors here as well.

01:43You know, this is a listing for a spin-off story as well.

01:48It's a listing that packages overseas assets into gold vehicles.

01:53That also makes it attractive for international investors.

01:57I mean, the general story, the global story, is that markets remain very uncertain, don't

02:03they?

02:03So, the fact that this IPO boom is happening at all, is this a sign that investor confidence

02:10in Chinese companies is growing?

02:12I think it can be taken like that, you know.

02:17I think we have seen very strong IPO performance this year in Hong Kong.

02:23We've seen, you know, it's, I think, $23.2 billion worth of IPOs and secondary listings.

02:30So, really impressive numbers.

02:32Busiest year since 2021.

02:34So, that does point to a sort of strong sentiment towards these Chinese firms and well-structured

02:42deals, even when sort of sentiment elsewhere is a little bit on the wobbly side.

02:47So, going specifically now to Zergin Gold, I wonder if you wouldn't mind comparing for me

02:54how it sits compared to other major global gold miners in terms of, I'm thinking in terms

02:59of competitiveness, general levels of production, and the global footprint as well.

03:06So, it does have a large diversified footprint.

03:09But I think, interestingly, it is still scaling.

03:12You know, whereas other large global international gold miners are very much established and have

03:20a strong operating history.

03:22Now, I think it does have a competitive advantage in the sense that it does have a Chinese parent.

03:26It's got this funding from IPO as well.

03:29It does mean that scaling could be rapid.

03:32But as I mentioned, it does just lack that operating history, which it will need in order to be

03:37able to close that valuation gap with its peers, such as Newmont or Barak.

03:43Fiona Sincotta, thank you very much indeed.

03:45Fiona Sincotta, thank you very much indeed.

03:46Fiona Sincotta, thank you very much indeed.

03:47Fiona Sincotta, thank you very much indeed.

03:48Fiona Sincotta, thank you very much indeed.

03:49Fiona Sincotta, thank you very much indeed.

03:50Fiona Sincotta, thank you very much indeed.

03:51Fiona Sincotta, thank you very much indeed.

03:52Fiona Sincotta, thank you very much indeed.

03:53Fiona Sincotta, thank you very much indeed.

03:54Fiona Sincotta, thank you very much indeed.

03:55Fiona Sincotta, thank you very much indeed.

03:56Fiona Sincotta, thank you very much indeed.

03:57Fiona Sincotta, thank you very much indeed.

03:58Fiona Sincotta, thank you very much indeed.

03:59Fiona Sincotta, thank you very much indeed.

04:00Fiona Sincotta, thank you very much indeed.

04:01Fiona Sincotta, thank you very much indeed.

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