Razer shares yesterday climbed 18 per cent in its Hong Kong coming-out party, as the maker of gaming laptops and accessories rode red-hot demand for first-time technology share sales this year.
The San Francisco and Singapore-based company closed at HK$4.58, a first-day performance bested only by e-book publisher China Literature and Wuxi Biologics among Hong Kong initial public offerings (IPOs) of more than US$500 million (S$680 million) this year.
Razer, whose green triple-headed serpent logo graces mice, headsets and notebooks for gaming enthusiasts, debuted just days after Tencent Holdings-backed China Literature soared 86 per cent on debut.
Razer, backed by Singapore's sovereign wealth fund and Hong Kong billionaire Li Ka Shing, raised HK$4.1 billion (S$715 million) and will use part of those proceeds to expand into smartphones, with a US$699.99 Android device designed specifically for gameplay.
Chief executive officer Tan Min-Liang, a gamer himself who owns about 42 per cent of the firm with his family, is set to become a billionaire following the public offering, according to the Bloomberg Billionaires Index.
"One element supportive to the Razer share price is favourable sentiment towards IPOs these days," said analyst Ke Yan, who contributes to research aggregator Smartkarma. "Valuation aside, Razer has a line-up of heavyweight investors and apparently Hong Kong investors buy the Li Ka Shing story."
Razer shares soared to as much as HK$5.49 yesterday, a 42 per cent gain. Its key backers include Singapore's GIC and Mr Li's Horizons Ventures.
Among Singaporean investors is Mr Koh Boon Hwee, who has a 1.9 per cent stake. Investment vehicle Pi Holdings, which has shareholders such as Mr Wee Ee Chao and Dr Loo Choon Yong, holds a 1.25 per cent stake.
Other backers include Mr Lee Hsien Yang, who is a 0.32 per cent shareholder, while The Hour Glass' Dr Henry Tay Yun Chwan has a 0.31 per cent stake.
"We thought it was a great opportunity to be the first global tech company to list in Hong Kong," Mr Tan said in an interview with Bloomberg TV yesterday, ahead of the trading debut.
"We've got this interesting position to be ahead of the tastemakers" after building a business of hardware, software and services, he said.
Hong Kong's red-hot market for technology listings has already surpassed the heady days of the dot.com boom. Fund raising from tech-related IPOs in the city, led by ZhongAn Online P&C Insurance, hit a record US$4.2 billion this year, according to data compiled by Bloomberg. That's more than five times the amount raised in Hong Kong during the global dot.com boom in 2000.
The heady sentiment recalls the boom-and-bust scenarios of past years. Hong Kong's most successful IPOs - based on an offer size of US$100 million or more and whose shares at least doubled on the first day of trading - typically took place near the peak of the market.