HONG KONG, Dec 11 (Reuters) - Chinese toy maker Pop Mart
International Group made a stellar debut on the Hong
Kong stock market on Friday, closing nearly 80% higher than its
issue price to end the day with a market capitalisation of $12.5
The firm, which sells the 'Molly' doll and figurines wildly
popular among China's cashed-up millennials, had opened 100%
higher in the initial burst of buying, before late profit taking
brought it back to close at HK$69, up 79.2% from its issuance
price of HK$38.5.
The broader Hang Seng Index rose 0.36% on the day.
Pop Mart's main product is a "mystery" toy box containing a
single figurine from different collections. Buyers do not know
which figurine they have bought until they open the box.
The stock was the most actively traded stock by turnover on
the Hang Seng on Friday, and maintained 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.
The IPO had been under consideration for at least a year but
the company and its advisors held off until the coronavirus
pandemic passed in China, according to sources working on the
Pop Mart has 136 mainland China stores and 1,001 vending
machines and plans to use some its IPO proceeds to open another
183 new retail shops and 1,800 more mobile outlets over the next
two years, the prospectus said.
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 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
stock shot up 150% on debut in July, Nongfu Spring Co Ltd
gained as much as 85% in September while JD Health
International Inc gained 56% when it debuted on
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
"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
KWG Living Living Group Holdings Ltd lost 23%
while Shimao Services Holdings Ltd and First Service
Holding Ltd dropped 23% and 27% respectively on their
(Reporting by Scott Murdoch and Donny Kwok; Editing by
Jacqueline Wong, Christopher Cushing & Simon Cameron-Moore)