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Yacht builder Ferretti<\/strong> back home? The luxury yacht builder is set to become the first Hong Kong-listed company to also set up in Milan.<\/p>\n <\/p>\n Its main shareholder, Chinese state-owned conglomerate Weichai Group<\/strong>, which bought the shipbuilder in 2012 when it was in trouble, plans to sell around half of its 64% stake via the Milan Stock Exchange.<\/p>\n <\/p>\n Ferretti, which went public in Hong Kong last year<\/strong>, intends to launch the share sale as soon as it receives approval from the authorities and subject to market conditions, according to a document filed with the Hong Kong stock exchange.<\/p>\n <\/p>\n This approach offers few advantages in terms of valuation. But it could provide a hedge against growing geopolitical risks<\/strong>, as tensions between China and the West intensify.<\/p>\n <\/p>\n With this return to the fold, Ferretti is stealing a march on the $17 billion Galleria<\/strong> bag manufacturer. But also its compatriot, the luxury group Prada<\/strong>, which is also tempted to follow suit.<\/a><\/p>\n <\/p>\n <\/p>\n Since its IPO in Hong Kong in 2011<\/strong>, Prada’s<\/a> shares have only been traded in the Asian financial center. However, this decision has resulted in disappointing annual returns of just 4%,<\/strong> including dividends, according to Refinitiv data. Despite expressing a willingness to trade shares in their home country, owners Miuccia Prada and Patrizio Bertelli<\/strong> were reluctant to reduce their stake by 80%<\/strong>, slowing IPO plans.<\/p>\n <\/p>\n Ferretti’s quick action now leaves Prada with no excuse. Lorenzo Bertelli, heir to the Prada fortune, has openly spoken of the need to hedge geopolitical risks with a European listing. The current changes could force Prada to take action sooner than expected.<\/p>\n <\/p>\n <\/p>\n For Ferretti, Hong Kong has been a useful springboard. By listing in the Asian financial center, CEO Alberto Galassi<\/strong> was able to secure the valuation of around $1 billion<\/strong> that he had failed to achieve in Milan in 2019<\/strong>. Having the conglomerate Weichai Group as parent company also helped. Five Chinese state-backed entities<\/strong> pledged to buy half of the new shares on offer before Ferretti’s $244 million IPO.<\/strong><\/p>\n <\/p>\n The financial logic of a second listing in Italy is not immediately obvious. Ferretti shares trade at 12 times<\/strong> this year’s forecast net profit of<\/strong> \u20ac78 million<\/strong>, a far cry from the 15-times<\/strong> multiple at its rival, Milan-based manufacturer Sanlorenzo<\/strong>. At a compound annual rate of 14%<\/strong>, Ferretti’s revenue growth since 2018 is admittedly well below the 23%<\/strong> rate achieved by Sanlorenzo.<\/p>\n <\/p>\n <\/p>\n Ferretti’s imminent market entry suggests that the technical hurdles that seemed to have held back Prada’s dual-listing plans are not insurmountable. One problem is the Italian stock market’s requirement that all shares be in digital form<\/strong>. In Hong Kong, many shares still exist as physical certificates and are only traded electronically once they have been deposited in a centralized system.<\/p>\n <\/p>\n To solve this problem, Ferretti has obtained a waiver from the Hong Kong authorities<\/strong> allowing it to convert its outstanding paper shares. Owners will have to deposit their shares with brokers or registrars within a specified period.<\/p>\n <\/p>\n <\/p>\n Read also >The Ferretti Group\u2019s debut on the Hong Kong Stock Exchange<\/a><\/p>\nPrada tempted to follow suit<\/h2>\n
Chinese help<\/h2>\n
Digital shares<\/h2>\n