Chinese Stock Rebound Sparks Rush to Raise Funds

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An electronic ticker displays stock figures in Pudong's Lujiazui Financial District in Shanghai on April 15. Photo: Bloomberg

(Bloomberg) — Chinese companies are rushing to take advantage of a recent equities rebound to raise funds, using what may be a narrow window before the market falters again.

Poly Developments and Holdings Group is considering raising as much as 12 billion yuan ($1.7 billion) via notes that can be turned into equity, Bloomberg reported Monday. Separately, Yankuang Energy Group Co. said it plans to raise funds through the sale of shares listed in Hong Kong while MMG Ltd. proposed a rights offering in the city.

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Chinese companies are raising funds to take advantage of a stock market rebound.
Poly Developments may raise 12 billion yuan ($1.7 billion) through convertible notes, while Yankuang Energy and MMG Ltd. also plan fundraisings.
Convertible bonds are popular, with Alibaba and JD.com raising $7 billion last month, but market momentum may be waning following initial gains due to government housing measures.

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Who’s Who

Poly Developments and Holdings Group: Poly Developments and Holdings Group is considering raising up to 12 billion yuan ($1.7 billion) via convertible notes. This move aims to capitalize on the recent rebound in the Chinese stock market. If successful, it would be notable as only three Chinese developers have raised over $1 billion through convertible bonds in the past twenty years.

Yankuang Energy Group Co.: Yankuang Energy Group Co. plans to raise funds through the sale of shares listed in Hong Kong. The company is among several Chinese firms seeking to leverage the recent rebound in the stock market to secure funding.

MMG Ltd.: MMG Ltd. proposed a rights offering in Hong Kong to raise funds, joining other Chinese companies looking to capitalize on a recent equities rebound. The firms are taking advantage of improved stock market conditions to secure cheap funding through equity or equity-linked notes.

Alibaba Group Holding Ltd.: Alibaba Group Holding Ltd. recently raised $7 billion through convertible bonds, in conjunction with JD.com Inc. Convertible bonds allow companies to raise funds cheaply without immediate stock dilution.

JD.com Inc.: JD.com Inc. recently raised $7 billion through convertible bonds, a tool that's popular for providing cheap funding without immediate stock dilution. This move is part of a broader trend where Chinese companies are leveraging equity-linked notes amid a stock market rebound to secure financing.

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What Happened When

By May 17, 2024：: Beijing unveiled a housing rescue package that included cutting mortgage rates and down-payments.

Through May 17, 2024：: A Bloomberg Intelligence stock index of listed developers surged more than 70% over the month when Beijing unveiled a housing rescue package.

May 17, 2024：: The gauge of the Bloomberg Intelligence stock index of listed developers started to fall in the following two weeks.

May 2024：: Alibaba Group Holding Ltd. and JD.com Inc. raised $7 billion together through convertible bonds.

June 3, 2024：: Bloomberg reported that Poly Developments and Holdings Group is considering raising as much as 12 billion yuan ($1.7 billion) via notes that can be turned into equity.

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