Cirrus Aircraft Debuts on Hong Kong Stock Exchange Amid Geopolitical Concerns
Cirrus Aircraft, the U.S.-based, Chinese state-owned airplane manufacturer, saw a mixed start on its first trading day in Hong Kong. Despite initial fluctuations, the stock closed at its IPO price, with company executives expressing confidence in future market recognition.
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The company’s shares opened at HK$27.50 but dipped to HK$26.05 before rebounding to close at HK$27.50, aligning with its IPO price set between HK$27.34 and HK$28.00. Vice Chairman Wang Hui expressed confidence in the market’s future acknowledgment of Cirrus’ value.
Founded in 1979 by Alan and Dale Klapmeier in Wisconsin, Cirrus faced financial difficulties before being acquired in 2011 by China Aviation Industry General Aircraft (CAIGA), a subsidiary of the state-owned Aviation Industry Corporation of China (AVIC). The acquisition was approved by the Committee on Foreign Investment in the United States (CFIUS) under a national security agreement, imposing specific oversight measures including advance notice for foreign employee visas and regular inspections by the Pentagon.
Despite AVIC being identified as a Chinese military-industrial company by former President Donald Trump, Cirrus is not directly impacted by these sanctions according to legal advisor Hogan Lovells International. CEO Zean Hoffmeister Vang Nielsen reassured that Cirrus’ products have no military applications and would comply with any additional CFIUS measures if imposed.
Cirrus’ IPO was underwritten by 12 Chinese firms led by CICC, with five cornerstone investors controlled by central or local Chinese governments. Vice Chairman Wang highlighted the choice of Hong Kong for its international investor base and potential for diversification.
The IPO raised HK$1.39 billion ($178 million), earmarked for expanding product lines, production capacity, and service support. Cirrus holds 32% of the global personal aviation market, offering the SR2X series and Vision Jet, with prices ranging from $626,900 to $3.24 million. The company reported $1.06 billion in revenue last year, marking a 19% increase, with net profits rising by 3% to $91.14 million.
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