FAST NEWS: Yan Palace narrows gain in HK trading debut

The latest: Xiamen Yan Palace Bird’s Nest Industry Co. Ltd. (1497.HK), which operates the largest bird’s nest brand in Mainland China, opened at HK$10.50in their Tuesday trading debut, 8.2% higher than their IPO price of HK$9.70, giving the company a market capitalization of about HK$3.45 billion.

Looking up: The local portion of the company’s public offering in Hong Kong was oversubscribed by about 87.3 times, representing the best public response for recently listed IPOs.

Take Note: Despite the favorable response to the public offering, the stock was priced at only the middle of the IPO price range of HK$8.80 to HK$11, reflecting the conservative view of its sponsor and management in the recent weak Hong Kong stock market condition.

Digging Deeper: Yan Palace was the largest maker of bird’s nest products in China last year in terms of retail sales, with a market share of 14%. The company first applied to list as early as 2011, but the plan was grounded after reports that some customers were sickened by excessive nitrite in some products. A second try in 2021 also failed to take flight before this year’s success. With the insistence of the management, the company applied for IPO in the Hong Kong Stock Exchange again this year and finally passed the listing hearing in November.

Market Reaction: Yan Palace narrowed its gains after the market opened on Tuesday, closing up only 0.6% to HK$9.76 by the midday break.

Translation by A. Au

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