BRIEF: Heavily oversubscribed Lemo soars on Hong Kong trading debut
Shares of massage chair operator Lemo Services Co. Ltd. (2359.HK) opened up 62% in their Hong Kong trading debut on Monday, and held on to most of the gains to close up 56% at HK$62.45 by the midday break.
The company sold 5.56 million shares for HK$40 apiece, representing the top of their range. The public portion of the offering for local Hong Kong investors was 7,323 times oversubscribed, while the international tranche was 5.8 times oversubscribed.
Lemo’s revenue rose 36% year-on-year to 797 million yuan ($112.7 million) last year, while its net profit declined 1.8% to 85.81 million yuan. In the first eight months of this year, its revenue increased 13.7% year-on-year to 630 million yuan, while its net profit continued to edge down 5.7% to 88.55 million yuan.
The company will use 60% of its HK$182 million in proceeds to expand its service network and market penetration. Another 20% will be used for technology upgrades, 10% will go to brand enhancement, and the remaining 10% will be used as general working capital.
By Lau Chi Hang
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