China's Nongfu Spring shares surge 85% in Hong Kong debut (updated)

Nongfu Spring

08/09/2020 04:48

(Adds morning trading, broker quote)
    By Scott Murdoch
    HONG KONG, Sept 8 (Reuters) - Shares of Chinese bottled
water and drinks producer Nongfu Spring Co Ltd  9633.HK  rose as
much as 85.3% higher than their initial public offering (IPO)
price on their first day of trading on Tuesday.
    The performance augurs well for other planned IPOs,
including financial technology firm Ant Group's dual Hong
Kong-Shanghai listing worth up to $30 billion, which could come
as soon as next month, Reuters reported citing sources.
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    Nongfu is China's leading bottled water producer and a
top-three player in the bottled tea and juice market, according
to its prospectus.
    The firm raised $1.1 billion in its Hong Kong IPO, pricing
its shares at HK$21.50 apiece, at the top end of their
indicative range.  urn:newsml:reuters.com:*:nL4N2FX0S0
    Its shares were trading at HK$34.75 by mid-morning, from a
peak of HK$39.85 reached soon after the market opened. 
    The benchmark Hang Seng Index  .HSI  fell 1%.
    "I would say we are seeing some institutions who did not get
an allocation in the international placement looking to buy the
stock on the market," said Steven Leung, UOB Kay Hian
institutional sales executive director.
    The high valuation makes it unlikely the share price will
continue to perform as well, Leung said.
    The IPO was hotly contested with the retail component of the
deal 1,148 times over-subscribed, and institutional demand 60
times over subscribed, showed documents lodged with the Hong
Kong stock exchange.
    Nongfu sold 388.2 million shares. Five cornerstone
investors, led by fund manager Fidelity, hedge fund Coatue and
Singapore sovereign wealth fund GIC, took stock in the deal.

 (Reporting by Scott Murdoch, Alun John and Donny Kwok in Hong
Kong; Editing by Tom Hogue and Christopher Cushing)
 ((Scott.Murdoch@thomsonreuters.com;))