Hong Kong’s IPO Market Sees Unprecedented Demand
Celebrity Power Boosts Healthcare Company’s IPO
Hong Kong’s retail investors have gone into overdrive, snapping up shares in Herbs Generation Group, a healthcare products company co-founded by Hong Kong actor Roger Kwok and his sister. The initial public offering (IPO) was oversubscribed a staggering 6,083 times, the second-highest on record in the city.
A Star-Studded Debut
Herbs Generation’s shares skyrocketed as much as 35% on their trading debut, eventually closing 10% higher at HK$4.14. This remarkable performance came despite the broader Hang Seng Index falling 0.6%. The company’s success can be attributed to its diverse range of health supplements, cosmetics, and skincare products under brands like Herbs, Zino, and Classic.
Immune System and Post-Covid Care Drive Sales
The company’s most significant revenue contributor was the “immune system and post-Covid care” segment, which accounted for over a third of sales between 2021 and 2023. This focus on health and wellness resonated with investors, particularly in the wake of the pandemic.
The Power of Celebrity Endorsement
According to Kenny Ng, a strategist at Everbright Securities International, the brand’s association with a well-known TV actor was a major draw for Hong Kong investors. However, not every consumer enterprise can expect the same level of enthusiasm. Ng notes that the recent positive performance of cosmetics giant Mao Geping has provided a spark to the market, with its shares surging over 70% on debut.
IPO Activity Heats Up in Hong Kong
China’s popular cheap eats food chain Xiaocaiyuan is set to list this week, with plans to sell 101 million shares for HK$8.50 each. While the IPO has not been significantly oversubscribed, 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.
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