Chinese toy maker Pop Mart doubles in value in Hong Kong IPO debut (updated)

Smoore International Holdings

11/12/2020 01:44

(Adds first-day trading comparisons)
    By Scott Murdoch and Donny Kwok
    HONG KONG, Dec 11 (Reuters) - Chinese toy maker Pop Mart
International Group  9992.HK , seller of the renowned 'Molly'
doll and figurines wildly popular among China's cashed-up
millennials, is now worth $14 billion after its stock price
doubled in its Hong Kong trade debut on Friday.
    The Beijing-based company's shares opened 100% higher in
their first session on Friday, continuing a run of strong
first-day performances for deals in the city.
    Pop Mart raised $676 million in an initial public offering
(IPO) which gave the company a valuation of $7 billion ahead of
the trading debut.
    With the price doubling, the company is worth at least $14
billion and the firm's founder Wang Ning, 33, is a now
billionaire with his 56% stake.  urn:newsml:reuters.com:*:nL1N2IQ0LK
    Pop Mart sells most of its toys in mystery boxes, meaning
shoppers at its 136 mainland China stores and 1,001 vending
machines do not know which figurine they get until opening the
box.
    The attraction of the toys even lured the normally serious
bankers who worked on the deal.
    "I bought a lot," said one dealmaker who could not
identified as he was not authorised to speak to media.
    The company priced its IPO shares at HK$38.50 in a deal that
was hotly contested by institutional and retail investors.
    Pop Mart's shares opened at HK$77.10, outpacing the broader
Hang Seng Index  .HSI  which is trading up 0.37% in the final
session of the week. It is Friday's most actively traded stock
by turnover on the Hang Seng.
    The share-price surge puts the stock among the
best-performing debutants for the city on record for deals over
$500 million, Refinitiv data showed.
    Just this year, Smoore International Holdings Ltd  6969.HK 
stock shot up 150% on debut in July, Nongfu Spring Co Ltd
 9633.HK  gained as much as 85% in September while JD Health
International Inc  6618.HK  gained 56% when it debuted on
Tuesday.
    GEO Securities Chief Executive Francis Lun said the first
day 'pop' of IPOs in Hong Kong was driven by investors taking on
leverage to buy into deals.
    "There is so much money chasing these deals, sooner rather
than later these punters are going to hit a rough spot and they
will realise that they can lose money on some deals," he told
Reuters.
    "The problem is people are too optimistic, they take on a
lot of leverage, interest rates are low and they think every
deal will make money."
    There have been deals in Hong Kong this year that have
failed to rise on the first day, especially in the property
services sector.
    KWG Living Living Group Holdings Ltd  3913.HK  lost 23%
while Shimao Services Holdings Ltd  0873.HK  and First Service
Holding Ltd  2107.HK  dropped 23% and 27% respectively on their
recent debuts.
    Pop Mart's main product is "mystery" toy boxes that each
hold a single figurine from different collections. Its
best-selling character is the round-faced Molly doll.
 urn:newsml:reuters.com:*:nL1N2IQ0LK.

 (Reporting by Scott Murdoch and Donny Kwok; Editing by
Jacqueline Wong and Christopher Cushing)
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters
Messaging: donny.kwok.reuters.com@reuters.net))