Glencore and Hillhouse Back $700 Million IPO of Chinese Aluminum Smelter

Chuangxin Industries Holdings Ltd., a Chinese aluminum smelter based in Inner Mongolia, has kicked off its initial public offering (IPO) in Hong Kong, drawing significant interest from prominent investors. The company is seeking to raise as much as HK$5.5 billion (approximately $707 million) through the sale of 500 million shares, priced between HK$10.18 and HK$10.99 each. According to a listing document dated Friday, Chuangxin Industries will offer 500 million shares, accounting for 25% of its total issued share capital. The company's IPO is expected to be one of the largest in Hong Kong this year, with the total funds raised potentially exceeding HK$5.5 billion. The offering is being managed by a syndicate of banks, including Goldman Sachs, Morgan Stanley, and UBS. The IPO has attracted notable investors, including Swiss commodity giant Glencore Plc and asset managers Hillhouse Investment Management and Millennium Management LLC. Glencore's participation is significant, given its extensive experience in the global commodities market. Hillhouse Investment Management, a prominent Asian investment firm, has also shown interest in the IPO. The IPO is expected to have a positive impact on the Hong Kong stock market, which has been experiencing a slowdown in recent months. The listing of Chuangxin Industries will add to the market's liquidity and provide a boost to investor confidence. The company's shares are likely to be listed on the Hong Kong Stock Exchange under the stock code 6886.HK. Chuangxin Industries Holdings Ltd. is a leading aluminum smelter in China, with a production capacity of 1.2 million metric tons per annum. The company operates a state-of-the-art smelter in Inner Mongolia, which is one of the largest aluminum-producing regions in the world. Chuangxin Industries has a strong track record of profitability, with net profits increasing by 15% year-over-year in 2024. The aluminum industry has been experiencing a surge in demand in recent years, driven by the growth of the electric vehicle market and the increasing use of aluminum in construction and packaging. Chuangxin Industries is well-positioned to capitalize on this trend, with its low-cost production capabilities and strategic location in Inner Mongolia. The IPO is expected to be completed in the coming weeks, with the listing date to be announced shortly. The success of the offering will depend on various factors, including market conditions and investor sentiment. However, with the participation of prominent investors and the company's strong fundamentals, the IPO is likely to be well-received by the market.