China toymaker joins global IPO first-day pop party with 112% jump

Shares in Pop Mart International Group jumped as much as 112 per cent on their debut on Dec 11, 2020. PHOTO: EPA-EFE

HONG KONG (BLOOMBERG) - A Chinese maker of toys encased in "mystery boxes" is the latest company to join the global initial public offering (IPO) first-day pop party.

Shares in Pop Mart International Group, whose offerings include rabbit figurines with monster teeth, jumped as much as 112 per cent on their debut on Friday (Dec 11), the second-best this year for IPOs over US$500 million (S$666.6 billion) in Hong Kong. That's a day after home rental platform Airbnb saw its valuation balloon to about US$100 billion on its trading debut in the US.

Flush with cash and hunting for yield as interest rates stay low, investors globally are flooding into new share sales in Asia and the US even as the year is drawing to a close.

This week saw Hong Kong's biggest IPO of the year, the US$3.5 billion float of JD Health International, surge as much as 76 per cent on its debut, a huge move for an offering of that size. The healthcare unit of China's No. 2 e-commerce company has benefitted as more people have turned to online healthcare services during the pandemic.

As Pop Mart's Friday surge shows, the IPO rally in Asia has extended beyond hot tech and healthcare names. The scrapping of what would have been the world's biggest IPO in November - fintech giant Ant Group's US$35 billion listing - added to the flood of cash by releasing funds that had been locked up for that share sale and now needed a new home.

In Pop Mart's case, China's faster emergence than other markets from the health crisis has focused investor attention on consumer names that should continue to be popular.

The Beijing-based firm raised US$674 million in an IPO which priced at the top of the range and stopped taking orders two days early because of overwhelming investor demand.

It makes toys with famous characters it designs or licenses from others, including Mickey Mouse and Harry Potter. One of its main products are "blind boxes", which contain a hidden figurine with one of its characters.

Another example of companies that investors have bought as benefitting from China's growth are in the real estate sector.

China Resources Mixc Lifestyle Services jumped 26 per cent on its debut on Wednesday, the second-best performance for a property management firm raising more than US$100 million from its float.

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