by winston » Wed Aug 06, 2014 5:45 am
vested
Meaty debut for pork firm
WH Group (0288), the world's biggest pork company, surged 7 percent on its Hong Kong trading debut yesterday after sharply lowering valuations in its second try at an initial public offering.
While WH Group's HK$16 billion IPO is the third-largest in Asia-Pacific this year, it raised less than half of its original target.
But even though it had a bumpy ride to market, many investors believe the firm, formerly known as Shuanghui International Holdings, will do well in the long term, given China's huge and growing appetite for pork and its highly fragmented local market.
"They're going to have a pretty distinct advantage within China in terms of assets," said Stephen Yang, an analyst at Sun Hung Kai Financial.
"There aren't many companies with the same sort of scale that they have and also international assets, so they can leverage that."
Per capita pork consumption in the mainland totaled just 41.36 kilograms in 2013, around half the 80.13kg in Hong Kong, according to the IPO prospectus.
WH Group shares closed at HK$6.66, up from its IPO price of HK$6.20 and giving the company a market value of HK$95.94 billion. The shares hit an intraday high of HK$6.86.
Proceeds from the IPO will go toward paying loans.
Source: REUTERS
It's all about "how much you made when you were right" & "how little you lost when you were wrong"