Ferretti launches $993 million IPO

Italian yacht builder Ferretti Group starts trading on the Hong Kong stock exchange today, after a successful IPO that values the company at US$993m.

The price of HK$22.88 per share (US$2.92) is at the lower end of the proposed range, which had valued the company at up to US$1.2 billion.

Ferretti offered a total of 83.58 million shares, equivalent to around 25 per cent of its total equity capital, generating net proceeds of approximately HK$1.77 billion (US$226m), after deduction of fees and expenses, and assuming the over-allotment option is not exercised.

Ferretti CEO Alberto Galassi tells the Financial Times: “I am exhausted but very happy. It hasn’t been all smooth sailing, especially given the geopolitical context, but the outcome is above our expectations.”

Galassi says that, while the ongoing Russia-Ukraine crisis and subsequent ban of yacht exports from Europe to Russia have caused concern, this hasn’t put off investors in Asia.

“Our shareholders were extremely [confident], then we also realised the war in Ukraine is seen as further away by investors in the Asia-Pacific region, who were more comfortable to invest at this stage,” Galassi tells the FT.

Around 70 per cent of the IPO total is made from Asian cornerstone investors.

Ferretti Group CEO Alberto Galassi

Ferretti, whose brands include Custom Line, CRN, Riva, Pershing and Wally, has customers including David Beckham, and is present in over 70 countries. Ferretti Group has been owned by the Chinese industrial conglomerate Weichai Group since 2012. In 2019, the company also attempted a listing, but it achieved a relatively low share price amid a weak market and changed its mind.

Thanks in part to a yachting boom caused by the pandemic, things are different now. Its rival Sanlorenzo has seen share prices rise dramatically, from €16.50 at the end of 2020 to €36.30 at the end of 2021.

Ferretti Group reported a significant rise in its order book during the pandemic, hailing 2020 as a record year for sales. The company says it currently has an order backlog of €1,272 million, as of 28 February 2022, and an order intake of €308 million in the first two months of 2022.

According to a statement made by Ferretti, the company was among the top ten industry players in terms of the number of superyachts sold worldwide in 2021. As of December 31, 2018, 2019, 2020 and 2021, the company’s net profit was €30.7 million, €26.6 million, €22.0 million and €37.4 million, respectively.

“We are proud that the value of Ferretti S.p.A., the financial soundness of our shareholders and the work of our management team have been recognised by so many global investors,” Galassi says in a media statement.

“Thanks also to their confidence, we will continue our growth with more power and acceleration. We are sure that we will be able to seize even more opportunities, leading the international yachting business,” Galassi continues. “Ferretti S.p.A. is the most relevant European company to have successfully completed the listing in the latest months; the market has welcomed us with great enthusiasm, as one of the epitomes of pure Italian luxury in the world.”