* Honworld shares rise as high as HK$8.91 vs HK$7.15 IPO
* Company among recent IPOs in niche industries favoured by
* IPO's retail tranche more than 1,045 times oversubscribed
(Adds recent IPOs in Hong Kong, comments)
By Elzio Barreto
HONG KONG, Jan 28 Shares of China's largest
maker of cooking wine soared on their Hong Kong trading debut,
as the city's retail investors flock to small listings of
companies in niche industries focused on Greater China's booming
Honworld Group Ltd, maker of "Lao Heng He" brand
cooking wine, soy sauce and vinegar, jumped as much as 25
percent in early morning trade on Tuesday, after an initial
public offering which raised $115 million thanks to droves of
The IPO was the most recent in sectors as disparate as
funeral services, night club management and food products that
have lured investors because of their growth prospects and
Magnum Entertainment Group Holdings Ltd, which
manages three night clubs in Hong Kong, soared 89 percent in its
debut last week, following a 45 percent first-day pop last month
for China's largest provider of funeral services, Fu Shou Yuan
International Group Ltd.
"The business is quite attractive to the retail investor,"
said Jasper Chan, corporate finance officer at brokerage Phillip
Securities, which provides margin loans to retail investors
looking to buy into IPOs. "There aren't a lot of peers in the
market and that's why people flock to these companies."
Shares in Honworld were trading around HK$8.69 after
reaching as high as HK$8.91, compared with an IPO price of
By comparison, the benchmark Hang Seng index was down
In the IPO, Honworld marketed 125 million new shares in a
price range of HK$4.95 to HK$7.15 each, and raised HK$893.75
The deal was flooded by orders from small investors, with
the retail portion generating more than 1,045 times demand than
the shares on offer, a company filing showed on Monday.
The institutional tranche of the IPO was also "significantly
oversubscribed", the filing showed.
Macquarie Group was the IPO's sole sponsor and global
coordinator. First Shanghai Securities Ltd also helped
underwrite the deal.
The banks stand to earn $3.45 million in fees for managing
the IPO, equivalent to a 3 percent underwriting commission and
undisclosed incentive fees for Macquarie.
($1 = 7.7639 Hong Kong dollars)
(Editing by Edwina Gibbs and Christopher Cushing)