On June 17, Pateo Connect (02889.HK) fell 10.12% in regular trading, trading at HK$189.2 per share, with turnover of HK$3.6922 million.

On the news front, the company announced on the same day that it entered into a placing agreement with a placing agent to issue 2.2593 million new H shares at HK$173.40 per share. The placement price represents a discount of approximately 17.59% to the previous trading day closing price of HK$210.4 and approximately 19.92% to the five-day average closing price of HK$216.52. The net proceeds of approximately HK$382 million are earmarked with roughly 80% for potential strategic acquisitions and investments focused on AI and core upstream/downstream segments under its integrated software-hardware-chip-cloud strategy, and approximately 20% for working capital.

The significant placement discount has compounded prior negative sentiment stemming from market skepticism over the company's proposed photonic chip acquisition announced on June 2, as well as ongoing profit-taking from the stock's earlier rally. The combination of dilution concerns and pre-existing headwinds has resulted in pronounced short-term selling pressure.

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