BRIEF: Xiao Noodles announces share buyback just a month after IPO

Noodle chain operator Guangzhou Xiao Noodles Catering Management Co. Ltd. (2408.HK) on Tuesday announced its board approved a mandate for the company to buy back up to 10% of its Hong Kong-listed shares, as it sought to support its recently listed slumping stock.

The company said its board took the step “in order to convey confidence in the long-term business prospect of the group, increase the company’s value and safeguard the interest of the shareholders.” It added the mandate is subject to shareholder approval at an upcoming meeting.

Xiao Noodles stock tumbled 28% on its first trading day on Dec. 5, after the company raised HK$617 million ($79 million) by selling shares for $7.04 apiece. The stock continued to slump after that and was down 38% from the listing price at Tuesday’s close of HK$4.33. The shares rose in Wednesday morning trade after the buyback announcement, and were up 3.7% at HK$4.49 by the midday break.

Shares of technology and other cutting-edge companies have done generally well in the recent wave of Hong Kong IPOs, while many companies from the consumer and other traditional sectors have fared poorly. Shares of hospital operator BenQ BM (2581.HK) have lost more than half their value since their Dec. 22 trading debut, while cultural tourism company Impression Dahongpao (2695.HK) is down 37% since debuting on the same day.

By Doug Young

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