A tea maker called Blockchain Group?! Hong Kong firms fail to revive flagging stock market fortunes with far-fetched name changes
- Blockchain Group, a traditional tea manufacturer formerly known as Ping Shan Tea Group, is one of many whose name change has failed to impress investors
- Many Hong Kong-listed firms are changing their names to associate themselves with boom industries they have nothing to do with
What’s in a name? When it comes to Hong Kong-listed companies looking to boost their stock market performance by changing their name to something more fashionable, then not much, the evidence suggests.
It is a common tactic deployed by firms looking to revive their flagging fortunes and bolster their share price. The chosen name is often an attempt to attract investors by signalling a connection with a boom industry, in many cases one that bears no relationship at all to the company’s business.
The practice can easily backfire, sometimes raising an immediate red flag with would-be investors, according to analysts.
Dickie Wong, executive director of research at Kingston Financial Group, said some companies have changed their names several times to affiliate themselves with trending concepts, such as internet, finance, biotechnology or solar energy over the past 20 years.
A recent example of an apparently misguided name change was the rebranding of CCT Land Holdings to Greater Bay Area Investments Holdings, a move approved by shareholders on February 20.