Cofco Meat Holdings, the pork producing unit of China’s largest state food conglomerate, saw its market value slump by as much as 24 per cent on its first day of trading in Hong Kong, putting it on track for one of the worst first-day performances among the city’s major initial public offerings this year.
The meat supplier, partly-owned by KKR and Baring Private Equity, opened in the morning about 6.5 per cent below HK$2.00 set for the offering of its 975.6 million shares – already at the bottom end of its marketed price range as a result of tepid investor appetite.
Shares closed Tuesday at HK$1.66, down 17 per cent from the float price. The benchmark Hang Seng Index edged up 0.93 per cent.
JPMorgan and Morgan Stanley were joint sponsors of the US$251 million IPO, according to filings to the Hong Kong stock exchange.
“Cofco Meat only managed to turn to profits last year following two years of losses, which obviously did not offer a good reason for investors to buy,” said Sam Chi-yung, a senior strategist with South China Financial Holdings.
The floundering debut of the Beijing-based hog producer drew parallels to a slew of companies whose shares limped out of the starting gate after high-profile IPOs over the last a few months.