Mainland manufacturers seeking to list in Hong Kong are facing pressure to sell shares at a big discount, reports the South China Morning Post.
Mainland factories are in need of money for expansion but investors view them as a sector that offers low growth and slim profit margins, notes the Post. One investment banker told the Post that shares of mainland factories are valued at a range way below other sectors.
Manufacturing activity on the mainland has slowed down since March this year. The HSBC China Manufacturing PMI fell to 49.4 in July from 50.4 in June, the fourth straight month of decline.
Dariusz Kowalczyk, an economist at French bank Credit Agricole, told the Post that costs have gone up because of rising wages.