LEE Ka Kit's investment in China Harmony New Energy Auto Holding Limited uncovers 'Tycoon-designated Placing Agent'

LEE Ka Kit's investment in China Harmony New Energy Auto Holding Limited uncovers "Tycoon-designated Placing Agent"

10 December 2019 (Hong Kong) - China Harmony New Energy Auto Holding Limited (3836.HK) announced on 21^st November that it would place up to 52 million new shares at HKD3 per share to Successful Lotus Limited, an investment company wholly-owned by Dr. Lee Ka Kit. The gross proceeds from the Placing will be approximately HK$156 million. The current stock price is 17% higher than the placing price. The stepping in the new energy for automotive business of one of four big families Mr. LEE Shau Kee, Kit's father, has long been the focal point of Asian media attention. Its investment in the new energy automotive industry uncovered the "tycoon-designated placing agent" - RaffAello Securities (HK) Limited ("RaffAello").

It is not uncommon to see RaffAello's name in the presence of HK Tycoons. RaffAello Securities (HK) Limited is managed by TANG Tsz Kit, the major shareholder and the executive director of RaffAello. Tang was found in the shareholder list of Real Nutriceutical Group Limited (2010.HK) and Infinity Development Holdings Company Limited (640.HK), while the name of Mr. LI Ka-shing, the wealthiest billionaire in HK, was also listed in these two companies. Big names including GIC, the Singaporean government investment company, Franklin Templeton and CCBI etc were also found on the shareholder list of Real Nutriceutical Group. Raffles Partners, a sister company of RaffAello, has worked with New World Development Company Limited (017.HK), which is owned by another tycoon Mr. CHENG Yu-tung. At that time, New World Development formed a joint venture company, High Surplus with Asian Development Bank. High Suplus and Raffles Partners were the cornerstone investors of Chigo Holdings Limited which was listed in the HKEx in 2009. BNP Paribas was the sponsor of the IPO project. The issue price was HKD2.27 and it rocketed to HKD16, reaching a historic high in the following year after its IPO.

In recent years, RaffAello worked with LEE Ka Kit very closely and has been the placing agent for LEE thrice. In the IPO project of Fineland Real Estate Services Group Limited (8376.HK), RaffAello Capital was the sole sponsor and RaffAello Securities was the sole bookrunner and the sole lead manager. RaffAello introduced Golf Limited, a company wholly owned by LEE, as one of the investors of this IPO project. In the same year, ZhuGuang Holdings (1176.HK) launched a rights issue. Golf Limited was one of the subscribers procured by the underwriter, RaffAello Securities.

RaffAello served as the "tycoon-designated placing agent" again in the recent placing of new shares of Harmony Auto. Harmony Auto was listed in 2013. It is a leading dealership group that deals exclusively in luxury and ultra-luxury passenger vehicles in China and provides services such as after-sales services, financing and insurance agents, and development of new energy vehicles. In 2015, Harmony Auto together with Foxconn and Tencent stepped into the new energy vehicle industry. Harmony Auto founded FMC, a smart intuitive vehicle company, in 2016. In 2018, Byton, a brand owned by FMC, released two concept vehicles and is now developing the third concept vehicle. The production of second concept vehicle, M Byte, is expected to be mass produced at the end of 2019 in Nanjing. LEE has invested in numerous intuitive vehicle projects and therefore it is not surprising to see him invest in Harmony Auto.

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