Hubei Sanonda Co, a Chinese farm chemicals maker, made a spectacular 69.2 per cent debut on the Shenzhen market yesterday, rising to $5.89 as investors bet on the potential of the agri-chemical sector.
At its peak, the stock hit a high of $6.30, an 81 per cent increase.
Boosted by the market's recent strength, the stock opened yesterday at $6.00, against the issue price of $3.48 a share. Fifteen million shares worth $84.6 million changed hands.
The Shenzhen B-Share Index has risen 17 per cent so far this year, helped by the booming A-share market, which was up 47 per cent despite a recent crackdown by regulators on brokerages.
The company, which has 5.4 per cent of the mainland farm-chemicals market, raised $348 million by selling 100 million B shares, or 35.5 per cent of its enlarged share capital. It also has A shares listed in Shenzhen.
At $3.48 a share, the issue was pitched at a fully diluted price-earnings multiple of 8.78 times the projected earnings for this year of 114 million yuan (about HK$106.5 million).
