Shares of insurance distributor Shouhui Group Ltd. (2621.HK) slumped in their Hong Kong trading debut on Friday after pricing strongly in their modest IPO. The stock opened at HK$7.50, down 7% from its IPO price of HK$8.08, and continued to drop during the morning session, closing down over 14% at HK$6.92 by the midday break.
The company sold nearly 19.3 million shares, with the final price at the top of its range of HK$6.48 and HK$8.08 per share. The local portion of the listing, equal to 10% of shares on offer, was oversubscribed by 989 times. By contrast, the international placement drew tepid interest and was just slightly oversubscribed.
The company raised HK$134 million ($17 million) in net proceeds from the offering. It will use the funds primarily to bolster its sales and marketing operations, improve its service quality and R&D capacity and upgrade its infrastructure. Some funds are also earmarked for strategic acquisitions and investments.
By Lau Chi Hang
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