China Resources Beverage shares jump almost 15% on Hong Kong IPO debut (updated)

China Resources Beverage (Holdings) Co

23/10/2024 07:07

(Adds Hong Kong trading in paragraph 3 and deal detail from
paragraph 4 onwards)
    By Scott Murdoch and Donny Kwok
       HONG KONG, Oct 23 (Reuters) - Drinks maker China
Resources Beverage's  2460.HK  shares traded nearly 15% higher
in their Hong Kong debut on Wednesday, giving dealmakers hope
that more big-ticket initial public offerings could be on the
way.
    The company sold 347.8 million shares in the deal at
HK$14.50 each to raise $650 million.
    The shares were trading at HK$16.64 in the early afternoon
session, up 14.8% from the IPO price. Hong Kong's benchmark Hang
Seng Index  .HSI  was up 1.8%. 
    China Resources Beverage's IPO is the second largest in Hong
Kong this year, following Horizon Robotic's  9660.HK  deal to
raise $696 million that was finalised on Tuesday. Those shares
are due to start trading on Thursday.
    The two deals, raising a combined $1.3 billion, have
provided optimism for dealmakers and suggested potential signs
of recovery in Hong Kong's IPO market following a near two-year
pause in new share sales.
    China Resources Beverage makes the popular C'Estbon water
brand and a range of milk and tea drinks sold across China. Its
parent, state-owned conglomerate China Resources Holdings will
keep a 51.1% stake after the listing. 
    The company's retail tranche of the IPO was covered nearly
234.5 times while the institutional portion of the deal was 25.5
times covered, according to the firm's regulatory filings. The
high rate of orders from retail shareholders meant 40% of the
shares on offer were sold to mom-and-pop investors.
    Those results were among the strongest subscription rates
for larger IPOs this year, but well off the Hong Kong market's
peak in 2021 when deals were often thousands of times
oversubscribed.
    "China Resources Beverage has performed relatively well 
because the public offering received a strong response with
substantial oversubscription in the international placement,
which was crucial (to its debut performance)," said Dickie Wong,
Kingston Securities' executive director of research.
    Some foreign investors, especially in the U.S, had shunned
investing in China for the past two years as geopolitical
tensions remained high and the world's second-largest economy
was recovering after pandemic-related lockdowns.
    The Hong Kong Stock Exchange and the Securities and Futures
Commission last week announced they would work towards reducing
the time it took to approve listings in a bid to help revive the
city's IPO market.

 (Reporting by Scott Murdoch in Sydney and Donny Kwok in Hong
Kong; Editing by Christian Schmollinger and Jamie Freed)
 ((Scott.Murdoch@thomsonreuters.com;))