Hong Kong restaurant chain's shares surge up to 17 fold on debut

Life Concepts Holdings

05/08/2016 15:40

HONG KONG, Aug 5 (Reuters) - Shares in Hong Kong restaurant 
chain operator Dining Concepts Holdings Ltd  8056.HK , which 
counts the son of China's richest man among its shareholders, 
surged as much as 17 times on its first day of trading on 
Friday. 
    Dining Concepts and its shareholders raised HK$90 million 
($12 million) through the offer on Hong Kong stock exchange's 
Growth Enterprise Market (GEM), with the top 25 investors taking 
up almost 95 percent of the total shares sold, regulatory 
filings showed. 
    GEM offers an opportunity to invest in "high growth, high 
risk" businesses. The Hong Kong stock exchange has been trying 
to improve governance and disclosure standards in this segment 
of the market.  urn:newsml:reuters.com:*:nL3N18G30Q 
    "There is a clear 'buyer beware' approach, there's a clear 
disclosure of the concentration," David Webb, a Hong Kong 
corporate governance activist said. "This will always happen in 
small, tightly held companies and this is one of them." 
    In a regulatory filing last week, the company said "the 
concentration of shareholders may affect the liquidity of the 
shares," and advised investors to exercise caution when dealing. 
    Company officials were not immediately available for 
comment. 
    Prometheus Capital, owned by Wang Sicong, son of Chinese 
billionaire and founder of Dalian Wanda Group Wang Jianlin, 
holds a 10.1 percent stake in Dining Concepts, regulatory 
filings showed. 
    The shares rose as high as HK$8.02 and closed at HK$4.3, 
compared to the IPO price of HK$0.45. Friday's surge took the 
market value to HK$3.4 billion, according to Reuters 
calculation. 
    "The disclosure which has been made is always made in these 
cases.. (it) is an adequate approach to warning the market, but 
if they choose to buy this they are gambling," Webb said, 
referring to stock market investors. 
    Quam Capital was the sole sponsor of the IPO. This week, 
Hong Kong securities market regulator fined Quam Capital 
HK$800,000 for failing to discharge its duties as a sponsor in 
relation to the listing of Gayety Holdings in 2011. Gayety later 
changed its name to Food Idea Holdings Ltd  8179.HK . 
    ($1 = 7.7546 Hong Kong dollars) 
 
 (Reporting by Denny Thomas and Summet Chatterjee; Editing by 
Ruth Pitchford) 
 ((denny.thomas@thomsonreuters.com; +852 2843 6358; Reuters 
Messaging: denny.thomas.thomsonreuters.com@reuters.net)) 
 
Keywords: DINING CONCEPTS DEBUT/IPO