MY TAKE
My Take
by

We'll drink to that, say club investors

PUBLISHED : Saturday, 25 January, 2014, 4:10am
UPDATED : Saturday, 25 January, 2014, 4:10am

I don't know if Magnum, the nightclub and disco operator, is a good investment. Its IPO this week more than doubled on its first day of trading, but then it promptly went south by more than 12 per cent yesterday. But if other IPO prospectuses were written in a similarly informative and entertaining way, we wouldn't have to worry about investor education.

Quite simply, Magnum's prospectus is the best-read of its kind, offering insights into Hong Kong's nightlife, clubbing habits, and the mores and manners when it comes to ordering drinks so as not to embarrass your date. Let's just say I know nothing about these sort of things, being a nice little middle-aged husband who goes home early after work.

Why does Magnum have three different clubs within walking distance of each other in Central? Because people go from club to club and rarely stay in the same place for long. The clubs make most of their money by selling drinks, which the prospectus helpfully defines as "generally known as alcoholic beverages served by glass and prepared by bartenders mixing different alcohol and ingredients". You can tell these guys are giving it to you straight when they don't call their bartenders mixologists as they do at many pretentious clubs.

But what are the drinks to order? Moet & Chandon champagne is Magnum's top earner. But the most popular at the moment is the Jagerbomb, which mixes beer or an energy drink with the Jagermeister liqueur made from 56 herbs and spices, with 35 per cent alcohol content. Smirnoff vodka is another popular drink, though if you want to impress friends and dates, Magnum recommends Belvedere Vodka, which sells at HK$5,000 a bottle.

Ironically, the apparent success and popularity of Magnum's clubs have to do with the financial crisis. Genetic studies have shown many Chinese have a low tolerance for alcohol, so they are not big spenders on drinks. But since the global crisis, there has been an influx of expatriates, many of them professionals with high-paying jobs, Magnum deftly observes, which make them ideal customers: heavy drinkers with money to spend. I was sadly allotted zero IPO shares, but the prospectus was a good exercise in local urban anthropology.

 
 
 

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