Friday, February 22, 2019
Martin Hennecke

Two IPO firms feel sting of global fears
Two companies that started trading shares yesterday had a dismal debut following the recent shakeout of global equity markets.

Local contractor Sheung Moon Holdings (8523) closed 20 percent lower at 40 HK cents compared to its IPO price of 50 HK cents per share, or a paper loss of HK$500 per minimum board lot. Electrical and mechanical engineering services provider Vistar Holdings (8535) also tumbled 20 percent to 13.6 HK cents. It meant a paper loss of HK$680 for every board lot of shares.

In contrast, local multibrand retailer Mi Ming Mart Holdings (8473) posted a modest gain, closing at 28 HK cents compared to its IPO price of 27 HK cents.

Mi Ming Mart founder Erica Yuen Mi-ming, who is also a local politician and actress, said her firm would focus mainly on developing its business, especially after the recent wild swings in the global equity market. She said Mi Ming Mart plans to open five more retail stores by March 2020 and added that physical stores generate 97 percent of revenue and the rest by its online business.

Meanwhile, four companies will make their debut today.

Custom cable assemblies supplier Time Interconnect Technology said its IPO has been oversubscribed 267 times and it raised net proceeds of HK$128 million. It priced its offering at 50 HK cents per share.

Time Interconnect plans to use the IPO net proceeds to expand its production capacity by acquiring a factory for about HK$88.6 million. It also intends to use portions of the IPO proceeds to bolster its marketing and enhance operational efficiency by upgrading its automation system.

Mecom Power and Construction, a construction engineering contractor, said its IPO was 160 times oversubscribed, enabling the firm to raise net proceeds of HK$262 million. It priced its offering at HK$1.25 per share.

Another contractor, Gain Plus Holdings, priced its IPO at 80 HK cents per share, the upper limit of its indicative price range of between 60 and 80 HK cents. Its IPO retail tranche was oversubscribed by 34.42 times. It raised net proceeds of HK$53.4 million.

Hong Kong-based restaurant operator Top Standard Corp priced its IPO at 35 HK cents per share. Its retail tranche was oversubscribed by 15 times and it raised net proceeds of HK$43.2 million.

All four firms that will make their debut today saw their prices tumble in gray-market trading yesterday.

Time Interconnect Technology closed 12 percent lower, Mecom Power and Construction fell 12.8 percent, Gain Plus Holdings tumbled 18.75 percent, and Top Standard Corp slipped 5.71 percent.

Previous news : Guangzhou R&F issues profit warning


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