- HK shares close puts market capitalisation at around $18 billion
- Proceeds to expand production capacity, upgrade supply chain
- Cornerstone investors include QIA, Temasek
HONG KONG/SINGAPORE, Feb 3 (Reuters) - China's Eastroc Beverage , a maker of energy drinks, made a muted Hong Kong trading debut on Tuesday after raising about $1.3 billion in a share sale.
Its shares closed at HK$251.8, just 1.5% higher than their offer price of HK$248 each, giving Eastroc a market capitalisation of around HK$141.2 billion ($18 billion).
The share sale will likely be the second-largest in the city so far this year. China's biggest pig breeder Muyuan Foods aims to raise $1.4 billion in an offering and will debut on Friday.
Kenny Ng, a securities strategist at China Everbright Securities International, said investor enthusiasm in Hong Kong listings leans toward new-economy, smart-manufacturing and technology firms due to their stronger growth prospects.
"In contrast, stocks from traditional economic sectors, such as Eastroc, often exhibit more stable trends following their listing," he added.
The company plans to use the proceeds for production capacity expansion and supply chain upgrades, brand building, overseas growth and potential investments and acquisitions.
Eastroc, which is also listed in Shanghai, sold 40.9 million shares at the top end of its marketed range. The retail portion was 57.46 times oversubscribed and the international tranche 15.60 times, a filing showed.
STRONGEST START SINCE 2021
Hong Kong has logged its strongest start to a year since 2021, with IPOs and second listings raising about $5.5 billion in January, the most since $7.6 billion was raised in January 2021, LSEG data showed.
Recent offerings and upcoming debuts include Muyuan, printed circuit board equipment maker Shenzhen Han's CNC Technology, and chipmakers Montage Technology and Axera Semiconductor.
Founded in Shenzhen in 1994, Eastroc also exports to countries in Southeast Asia such as Vietnam and Malaysia.
A major functional beverage company, its market share in China has grown from 15% in 2021 to 26.3% in 2024, it said in its prospectus, citing consultancy firm Frost & Sullivan.
Functional beverages are drinks formulated with added ingredients such as electrolytes or vitamins, and are usually marketed for benefits such as energy replenishment or hydration.
Revenue in the nine months ended September rose 34% to 16.8 billion yuan from the same period a year ago, while net profit jumped 38.7% to 3.8 billion yuan.
Cornerstone investors include Qatar Investment Authority, Temasek Holdings (TEM.UL), True Light Capital, BlackRock, Tencent, and HongShan Capital.
Huatai International, Morgan Stanley and UBS are the sponsors.
($1 = 7.8105 Hong Kong dollars)
($1 = 6.9412 Chinese yuan)
Reporting by Donny Kwok in Hong Kong and Yantoultra Ngui in Singapore; Editing by Christian Schmollinger, Stephen Coates and Edwina Gibbs
Source: Reuters