FAST NEWS: Carote surges in Hong Kong trading debut
The Latest: Shares of Carote Ltd. (2549.HK) opened at HK$9.50 in their Wednesday trading debut, 64.4% higher than their IPO price of HK$5.78, giving the kitchenware maker a market capitalization of about HK$5.09 billion ($653 million).
Looking Up: The local portion of the company’s public offering was significantly oversubscribed by 1,346 times, reflecting strong demand from retail investors.
Take Note: With about 130 million shares offered, the company raised HK$750 million, lower than the HK$930 million target it was rumored to be seeking a month ago.
Digging Deeper: Carote was established in 2007 as an original equipment manufacturer (OEM) of kitchenware using designs supplied by overseas brands. Using its acquired knowhow, it shifted to original design manufacturing (ODM) in 2013, still cranking out products for other brands. In 2016, it launched its own Carote brand and sold its products over China’s major e-commerce platforms and American giant Amazon (AMZN.US), with a sales network spanning the U.S., Western Europe, Southeast Asia and Japan. The company’s strong debut comes as Chinese stocks have rallied sharply over the past week, including a 6.7% gain for the Hang Seng Index in Wednesday morning trade, following Beijing’s announcement of a major new economic stimulus plan.
Market Reaction: Carote gave back some of its gains after the market opened on Wednesday, but was still up 39.3% to HK$8.05 by the midday break.
Translation by A. Au
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