China's Neusoft Xikang drops 43% in Hong Kong trading debut, while AI firm rises

The Shanghai-based company raised $81.5 million in its initial public offering

SYDNEY (Reuters) - Shares in Chinese hospital cloud software firm Neusoft Xikang Holdings Inc plunged nearly 43% in the company's Hong Kong trading debut to end at their intraday low on Thursday, as sentiment towards some new share sales remained weak.

The Shanghai-based company raised $81.5 million in its initial public offering (IPO) last week and priced the shares at HK$4.76 each, the bottom end of the price range flagged to investors.

Neusoft Xikang ended down 42.9% at HK$2.72 after it opened 22.4% lower, with 6.3 million shares worth HK$20.94 million ($2.68 million), changing hands.

That compared to a 1.4% fall in the benchmark Hang Seng Index (.HSI) and a 1.5% drop in Hang Seng Tech Index.

Investor demand for the share sale was weak, with retail shareholders not taking up their full entitlement in the deal, according to the company's Hong Kong Stock Exchange filings.

The institutional portion of the deal was only covered 1.15 times, which is considered weak demand during an IPO.

Separately, Chinese AI startup firm Beijing Fourth Paradigm Technology Co Ltd (6682.HK) jumped as much as 16.9% to HK$65 after it opened 13.4% higher in its Hong Kong trading debut on Thursday. The stock closed at HK$58.50, still up 5.2% from the IPO price.

The firm raised $151 million in its IPO and also priced its shares at the low point of the price range.

Beijing Fourth Paradigm is on the U.S. entity list, which means U.S. suppliers are barred from shipping U.S. technology to the company unless they can procure a hard-to-obtain licence from the Commerce Department.

Retail demand for Beijing Fourth Paradigm was considered stronger than usual with that tranche 11.4 times covered, according to its filings.