HONG KONG (Nikkei Markets) -- Shares of B & S International more than tripled on their trading debut and were among the most actively traded in Hong Kong on Wednesday after an initial public offering from the food-and-beverage distributor and retailer drew strong retail demand.
The stock opened for trading at HK$2.75, compared with its IPO at HK$1.00, and jumped as high as HK$3.25 in the early minutes. It was at HK$2.99 as of 11:43 a.m., fetching it a market capitalization of around HK$1.2 billion. It was among the top five most actively traded in Hong Kong, with turnover in excess of HK$593 million ($75.7 million).
While Wednesday's rally disregarded a 1.2% decline for the Hang Seng Index, some market participants expected broad market losses to take the sheen off some of the stock's gains. The company operates a franchise of the popular bubble tea beverage in Hong Kong.
"The stock may be affected by today's negative market sentiment, but it will rise on the strong demand and its unique theme," said Andy Wong, chief investment strategist at wealth-management company Harris Fraser (International). "I think 30% lower from its highest price should be a suitable level."
The gains came after B&S' 100-million-share offering was priced at the top of an indicative range of 80 Hong Kong cents to HK$1 apiece. A 10-million-share portion of the offering reserved for Hong Kong investors received subscriptions for about 2,600 times that number.
B & S plans to use proceeds from the offering to open new retail outlets, set up warehouse facilities, and meet general working capital needs.
The company reported a 13.8% decrease in profit to HK$6.6 million for the five months ended Aug. 31, even as revenue grew 20.2% to HK$169.7 million. The decrease in profit was due mainly to listing expenses, the company said.
Meanwhile, shares of A&S Group Holdings climbed to 56 Hong Kong cents from their IPO price of 48 Hong Kong cents. The air-freight forwarding services company's 250-million-share IPO was priced near the top end of an indicative price range of 30 Hong Kong cents to 50 Hong Kong cents.
-- Carrie Chen