[HONG KONG] Shares of Thai coconut-water maker IFBH rose as much as 67 per cent on their first day of trading in Hong Kong following a HK$1.16 billion (S$188 million) initial public offering (IPO), the latest sign of renewed vigour in the city’s equity capital market.
The stock jumped to as high as HK$46.50 in early morning trading after it was priced at HK$27.80 per share, the high end of its marketed range. The deal attracted robust demand as it was 2,682 times oversubscribed, which was bolstered earlier by high margin financing from retail investors for the shares. Its cornerstone investors included UBS Asset Management and Black Dragon.
The IPO will help the company’s ambition to expand its business in China, where it says it already boasts a leading market share. It also adds to a growing list of companies listing in Hong Kong, whose IPO market has shaken off years of sluggishness to stage a strong comeback as investors move to diversify.
“The ready-to-drink soft drink market in Greater China holds growth potential,” according to Tina Banerjee, an independent analyst who publishes on Smartkarma. IFBH’s “market leadership position provides it ample room to keep costs under control”.
IFBH’s revenue rose 80 per cent in 2024, primarily due to a sales increase in mainland China, according to its prospectus. The country accounts for more than 92 per cent of its total sales, it said.
The company’s 2024 sales growth outpaced that of some of its main competitors, including Vita Coco and Hainan Yedao, according Bloomberg-compiled data. Its rapid growth can be attributed its “light asset” model that calls for outsourcing production and packing to others, according to Banerjee.
Part of the IPO proceeds will be used to support its business in China, where the ready-to-drink soft beverage market is expected to expand at a compounded annual growth rate of 7.1 per cent by 2029, according to the company.
The company also plans to expand to other regions, including Australia, the Americas and South-east Asia.
Citic Securities was the sole sponsor for IFBH’s listing in Hong Kong. BLOOMBERG
