Bottled water from Nongfu Spring at a supermarket in Hangzhou, China.
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SINGAPORE: Shares of Chinese bottled water giant Nongfu Spring surged more than 85 percent in Hong Kong’s stock market on Tuesday.
The stock reached about 35.00 HKD ((4.52) before opening at HK 39 39.80 per share ($ 5.14). Its initial public offering price was HK 21 21.50 (77 2.77), allowing the company to raise about 1. 1.1 billion. .
Dicky Wong, executive director of Kingston Securities, told CNBC’s “Squawk Boxx Asia” that Nongfu Spring was “the hottest IPO ever” in Hong Kong’s stock market history. He pointed out that the IPO has been subscribed 1,148 times.
Wong explained that investors are only interested in the stock for its “fundamentals or its highly profitable period”. He added that the general lack of investment opportunities has led to higher valuations of many stocks – especially technology or internet companies.
“So investors think that (new entrants) participating in a new IPO is always the best strategy.”
Nongfu Spring has sold 388.2 million shares in its IPO deal. Its core investors include fund manager Fidelity, hedge fund quota and Singapore sovereign wealth fund GIC. Its IPO is the largest in Hong Kong this year.
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