It has not been an auspicious year for the initial public offering market in Hong Kong.
Even the hype leading up to the listings of BOC Hong Kong (Holdings) and CK Life Sciences Int'l (Holdings), by far the most talked about debuts of the year, has not been translated into reality as both stocks have struggled to stay above water.
Although mainland battery manufacturer BYD had a quieter debut when it listed on July 31, its performance has been more impressive. The H share, which had an IPO price of HK$10.95, peaked at $15.65 on Wednesday before profit takers crept in and sent it back to a still impressive $14.90 at Friday's close.
Analysts are divided over the stock and the pace of its rise. Some say the company - which today reports its first interim results since listing - is growing strongly from a low base and deserves to trade at a premium to traditional manufacturers. Others say the stock is just a battery manufacturer and should trade in line with second-line industrial stocks.
ABN Amro analyst Michele Mak said the stock was trading at 12.6 times forward earnings, but she made it quite clear which side of the fence she sat on.
'We came away from a meeting with management last week even more positive than we were before the IPO, when we advised investors to subscribe to the new issue,' she said, slapping an $18.50 price target on the company.
BYD is the world's fourth largest manufacturer of lithium-ion batteries - the mainstay of the mobile handset industry - by sales. While its overall market share by value is only 4 per cent, according to ABN Amro, it offers another example of how the mainland's low-cost labour pool is giving foreign manufacturers a run for their money.