Stellar debut puts small-caps in focus
With its shares more than doubling, Tong Ren Tang spin-off taps rosier market mood to rank as third-best performer for a first day's trade
The price of Beijing Tong Ren Tang Chinese Medicine shares more than doubled on debut yesterday, evoking memories of the small-cap bull run during the internet bubble days.
A brighter outlook for the United States economy and the exceptionally loose monetary policy adopted by major central banks the world over to keep their economies humming have rekindled interest in equities.
The improved sentiment kept the Hang Seng Index above the 23,000-point level yesterday in a fresh three-month high. The index closed 0.58 per cent higher.
"The company has laid out a bold expansion plan for the European market, which is set to be its next growth driver after achieving a meaningful presence in Asia," Beijing Tong Ren Tang chief executive Ding Yongling said in a media briefing yesterday.
Ding said the company planned to spend about HK$100 million on store expansion in its new markets, including Britain and Poland. In the latter, the company would set up a cultural centre to promote Chinese medicine culture.
On its slow inventory turnover, chief financial officer Lin Man said the increase in inventory was the result of a change of accounting procedures and the rising prices of raw materials.