Secrets and strategy all part of Bawang formula

Just like a famous fried chicken brand, the secret recipe for Bawang International (Group) Holding's Chinese herbal shampoo is guarded zealously. Only the company's founder Chen Qiyuan and co-founder Wan Yuhua, his wife, know what the ingredients are.

'Only we have full access to the formula and even our son cannot see it,' says Mr Chen, adding that the 13-year-old Guangdong firm has not applied for patent protection for fear the recipe would be leaked.

While the formulation may remain cloaked in secrecy, Bawang is in the spotlight. Shares in its HK$1.67 billion initial public offering in Hong Kong climbed 27.31 per cent on their trading debut on July 3. The stock closed at HK$3.15 on Friday, 32.35 per cent above its debut price of HK$2.38.

The martial arts expert who reveres Mao Zedong takes an unconventional approach to marketing his product, which claims to eliminate dandruff and hair loss. Although some fund managers have uncharitably noted that Mr Chen himself lacks a full head of hair, his portrait is on every bottle of Bawang shampoo.

Mr Chen said the idea was to instil confidence in consumers. 'If your product has a problem, everyone knows who the boss is,' the 47-year-old said.

Thanks to the shampoo's high brand recognition, Bawang received more than HK$70 billion worth of orders from retail investors at its initial offering, making it one of Hong Kong's most popular listings this year. Not bad for a company that was hardly known outside Guangdong until a few years ago.

The company's profile was lifted when Mr Chen hired action star Jackie Chan as its spokesman in 2005.