FAST NEWS: Wuhan Youji shines on trading debut

The Latest: Toluene derivative products provider Wuhan Youji Holdings Ltd. (2881.HK) opened at HK$9.88 in their Tuesday trading debut, 79.6% higher than their IPO price of HK$5.50, with a market capitalization of about HK$920 million ($118 million).

Looking Up: The local portion of the company’s public offering in Hong Kong was oversubscribed by 337 times, which reflects enthusiastic public response.

Take Note: The international portion of the offering was only about 92% subscribed, representing lukewarm interest among institutional investors.

Digging Deeper: Wuhan Youji is a well-known toluene derivatives supplier in China and the global market, focusing on toluene derivatives through organic synthesis process, which are mainly used in food preservatives, household chemicals and animal feed acidifiers. The company is the largest manufacturer of benzoic acid and sodium benzoate and the second largest manufacturer of benzyl alcohol in China by sales revenue last year. The company is the largest manufacturer of benzoic acid and sodium benzoate and the second largest manufacturer of benzyl alcohol in China based on last year’s sales revenue. Although the company has been profitable for the past three years, its net profit in 2023 dropped 78.6% to 72.9 million yuan ($10.1 million). It passed the listing hearing of the Hong Kong Stock Exchange in March this year, and raising about HK$26 million through the IPO.

Market Reaction: Wuhan Youji extended its gains after the strong opening on Tuesday, finishing up 80% at HK$9.90 by the midday break.

Translation by A. Au

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