Sportswear firm Xdlong may lack listing bounce amid poor sentiment

Xdlong International, a listing candidate seeking to raise up to HK$990 million in a Hong Kong offering, may find it hard to impress investors, as the market is in no shortage of similar stocks and sentiment towards new offerings remains poor, market watchers say.

'The performance of the stock is expected to follow the fate of newly listed companies including its industry peer Xtep, mainly because of the poor market sentiment,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities.

'When the market is bad, the new offering market is worse.'

The benchmark Hang Seng Index rose 153.3 points or 0.68 per cent last week to close at 22,745.6, the first weekly gain in five weeks. Shares of Xtep International Holdings, which went public earlier this month, have lost 26.84 per cent since their trading debut.

Xdlong, the mainland's fourth-largest sportswear maker and retailer by brand revenue, plans to sell 500 million shares - representing 25 per cent of its enlarged share capital - at HK$1.38 to HK$1.98 each to boost its brand and expand its sales network.

Goldman Sachs and Deutsche Bank are the deal arrangers. The roadshow for the offering began yesterday and the stock's trading debut is expected on July 11.

The company, partly owned by GS Investor, a Goldman Sachs affiliate, has cut the size of the offering from US$300 million previously. The family of founder Lin Shupan owns more than 70 per cent of the firm.