HONG KONG (BLOOMBERG) - Just when you thought Hong Kong's IPO market couldn't get any frothier, a bubble tea maker just surged 217 per cent in its debut.
Shares of B & S International Holdings Ltd, known for a famous franchise called TenRen, is having the strongest trading debut of 2018, rallying to HK$3.17 at 2:48pm, after pricing at HK$1. With orders for 2,601 times as many shares as were sold, the IPO was the most oversubscribed among 51 Hong Kong IPOs this year, and the second most ever.
Hong Kong IPO are sizzling in 2018. The initial retail portion of an average offering has been 225 times subscribed this year, more than double the level in 2017, data compiled by Bloomberg show.
Franchised under brands including Taiwan's TenRen, B & S operates 42 retail outlets in Hong Kong, according to its share sale prospectus. The company generated about 43 per cent of its revenue from the retail business for the five months ended Aug 31, the document shows.
Whether the first-day pop lasts remains to be seen. Ulferts International Ltd, an operator of furniture stores, soared 186 per cent on its Jan 29 trading debut, but the gain has narrowed to 45 per cent above its offer price.
"This is an irrational rally driven by speculators chasing a relatively small stock," said Ronald Wan, chief executive of Partners Capital International in Hong Kong, "It's just a franchise chain and we have numerous Taiwanese bubble tea companies in Hong Kong."