FAST NEWS: China’s First Collagen Stock Giant Biogene Shines on Trading Debut

The latest: Giant Biogene Holding Co. Ltd. (2367.HK), a fast-growing skin-care products maker, made its trading debut in Hong Kong on Friday with an opening price of HK$26, up 7% from its IPO price of HK$24.30.

Looking up: The local portion of the company’s offering was subscribed by 5,450 investors for a total of 4.71 million shares, representing an oversubscription rate of approximately 1.08 times.

Take Note: The stock priced at the bottom of its IPO range of HK$24.30 to HK$27.70. The deal raised about HK$496 million ($63.6 million), far below the company’s rumored target of HK$3.9 billion.

Digging Deeper: As the largest collagen skin care products manufacturer in China, Giant Biogene’s business has grown rapidly in recent years, with revenue surging from 957 million yuan ($131 million) in 2019 to 1.55 billion yuan last year. Its net profit increased from 575 million yuan to 828 million yuan during the period. The company’s gross margin has exceeded 83% for the past three years, reflecting the high profitability of its business. The company first applied for a Hong Kong listing in May this year, making it the first in the collagen field to go public in China.

Market Reaction: Giant Biogene extended its gains after the strong opening on Friday, finishing up 18.1% at HK$28.70 by the midday break.

Translation by Jony Ho

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