Asian hotpot operator becomes latest retail frenzy IPO

LH Group, which operates the popular Wagyu steak hotpot Mou Mou Club and Gyu-Kaku Japanese Barbecue brands in Hong Kong, has become the latest IPO listing to go supernova.

The city’s second-largest Japanese catering brands operator, which counts MTR Corp chairman Frederick Ma Si-hang as a cornerstone investor, has drawn individual buying orders nearly 1,000 times greater than the number of shares available, adding to the list of smaller new offerings that have sparked a retail frenzy in the first half of this year.

So far in 2018, four new stock listings on the main board have seen their retail portions oversubscribed by a factor of more than 1,000 times. Investors vying for shares of Tianbao Energy saw the IPO oversubscribed 1,592 times, while Most Kwai Chung was driven to 6,288 times, B&S International Holdings was 2,599 times, and Dragon Rise Group saw orders exceed shares available by a factor of 1,680 times.

Three of the IPOs are trading above their offer prices since listing, while the Tianjin-based power operator Tianbao Energy fell on its first day of trade and is down 14 per cent from its offer price.

LH Group has priced its IPO at HK$1.10, raising a total of HK$220 million (US$28 million) in the offering. The stock is expected to be trading on the main board on Wednesday.