Uni-President up in Hong Kong debut

HONG KONG (Reuters) - Shares in Uni-President China Holdings (0220.HK), the mainland China arm of Taiwan's largest food and beverage company, rose 12.6 percent in their Hong Kong trading debut, beating expectations and bucking a dismal market.

The debut comes after a series of recent disappointing first-day performances amid volatile markets due to worries about the U.S. economy and monetary tightening in China.

Shares in Uni-President, which makes and distributes instant noodles and beverages in China, shrugged off early losses and outperformed the 3.5 percent fall in the benchmark Hang Seng Index .HSI after the firm's IPO raised $477 million.

"Chinese consumption plays are the stocks which are less affected by China's tightening policies. And due to the brand name of Uni-President, it should perform better than recent IPOs," said Ben Kwong, chief operating officer at KGI Asia.

He said investors were trying to sell off Chinese financial and properties stocks squeezed by Beijing's efforts to stave off inflationary pressures.

Shares in Uni-President China, which is a spin-off from Uni-President Enterprises (1216.TW), fell as low as HK$3.97 in the morning before rising to HK$4.75 at the market close. The firm priced its IPO at HK$4.22 per share, which was in the middle of its indicated range.

Its closing price values the company at 25 times the 2008 earnings forecast of its underwriters. By comparison, rival Tingyi (0322.HK) trades at 37 times forecast 2008 profit and Huiyuan Juice (1886.HK) trades at 26 times.

The deal attracted orders for 4.56 times the shares offered to retail investors.

The company, sold 881.72 million shares, or a quarter of its enlarged share capital, in a deal sponsored by UBS (UBSN.VX) (UBS.N) and Morgan Stanley (MS.N).

Uni-President China joins several Taiwan companies that have chosen to list their Chinese subsidiaries in Hong Kong to get around Taiwan's ban on companies putting more than 40 percent of their capital into the mainland.

Recent Hong Kong listings by Taiwan companies have not been star performers after their stock market debuts.

Shares in Chinese meat processor DaChan Food Asia (3999.HK), a unit of Great Wall Enterprise (Taiwan) Co (1210.TW), have fallen 17.6 percent since their October listing.

Shoe maker Stella International's (1836.HK) stock has risen 7 percent since its July float, compared with the 18 percent rise in the Hang Seng index over the same period.

(Reporting by Kennix Chim; Editing by Anne Marie Roantree, Edmund Klamann and Lincoln Feast)