'The recent volatile market was the major factor in dragging down Honghua's share price,' said Nelson Chan Kai-fung, the general manager of Bright Smart Securities.

Because of market uncertainties and a possible global downturn, the Hang Seng Index has tumbled 19.1 per cent this year. The blue-chip index plummeted 841.4 points or 3.6 per cent yesterday.

As many as eight listing candidates were forced to scrap their share sale plans in January.

Honghua's trading debut also proved to be a far cry from New Media Group's first day on February 12. The city's first initial public offering this year saw the Hong Kong-based magazine publisher gain 111.76 per cent in share value to HK$1.44 on its debut.

But the media stock eventually succumbed to market volatility, retreating over time to 84 HK cents yesterday.

'China Railway Construction Corp is really an exception, and apart from it I do not see other new IPOs having a bright outlook under such lacklustre circumstances,' Mr Chan said.

The country's second-largest infrastructure construction contractor closed its public offering on Wednesday as Hong Kong's most popular offering, after receiving a record HK$540 billion worth of orders from retail investors. This was more than Alibaba.com's HK$447 billion. China Railway Construction is scheduled to start trading on Thursday.

Honghua chairman Zhang Mi remained bullish about the company's future, saying that from a long-term perspective, Honghua would do well as the world's increasingly high demand for oil would benefit the oil-rig production business.

'We expect our net profit to grow 30 per cent and more in the next few years,' Mr Zhang said.

In its listing prospectus, Honghua forecast a net profit of at least 538.3 million yuan for last year, up 30.4 per cent from 2006. Its major clients include PetroChina and China Petroleum & Chemical Corp.

Losing out

Investors suffered a loss of HK$330 on each board lot of 1,000 shares

The net proceeds Honghua raised from the global share offering, in HK$: $2.97b