Retail investors jumped at the chance to invest in Hong Kong actor Roger Kwok’s company, with the initial public offering (IPO) oversubscribed more than 6,000 times, the second-highest on record in the city.
Herbs Generation Group, the healthcare products company co-founded by Kwok and his sister, priced its shares at the low end of its range at HK$3.75, resulting in the retail tranche being oversubscribed 6,083 times. The international portion was oversubscribed 0.8 times.
Most Kwai Chung, which launched its HK$95.3 million IPO (US$12.3 million) in 2018, holds the oversubscription record in Hong Kong at 6,288 times.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Herbs Generation’s shares jumped 25 per cent to HK$4.69 on their trading debut on Thursday.
The company sells a range of health supplements, cosmetics and skincare products under brands such as Herbs, Zino and Classic. Its most significant revenue contributor was the “immune system and post-Covid care” segment, which accounted for more than a third of sales between 2021 and 2023.
One of the reasons Herbs Generation’s IPO attracted hordes of Hong Kong investors is because of the brand’s association with a well-known TV actor, according to Kenny Ng, a strategist at Everbright Securities International.
While the star appeal of Herbs Generation’s promoter appears to have generated quite a buzz, not every consumer enterprise is likely to be greeted with the same level of investor interest and enthusiasm, he added.
The recent positive performance of cosmetics giant Mao Geping has provided some spark to the market, Ng said. Mao Geping’s shares surged more than 70 per cent on their debut last week.
The Chinese company attracted overwhelming response from retail investors who oversubscribed the shares 918 times, while the allocation for global investors was oversubscribed 29 times, according to a filing to the Hong Kong stock exchange.
China’s popular cheap eats food chain Xiaocaiyuan lists this week. It plans to sell 101 million shares for HK$8.50 each on Friday, which would raise about HK$860 million, according to its prospectus.
The IPO has not been significantly oversubscribed, according to brokers familiar with the deal, who added that it could be because the brand is not well known among local investors.
Meanwhile, five Chinese firms – Minieye Technology, Xunfei Healthcare Technology, Shenzhen Dobot, Healthy Way, and InnoScience Technology Holding – are set to launch their IPOs before the year-end.
IPO activity in Hong Kong has improved markedly in the second half of the year, thanks to mega deals like Midea Group and SF Holding. The rebound is expected to put the city’s exchange in fourth spot in the global league table, according to EY.
More from South China Morning Post:
- Chinese IPOs surge in Hong Kong as Minieye, Guming line up listings
- Chinese social media Xiaohongshu moves closer to IPO as profits surge in 2024, sources say
- Hong Kong IPO: Chinese soy sauce maker Foshan Haitian eyes dual listing
For the latest news from the South China Morning Post download our mobile app. Copyright 2024.
