Hong Kong beverage maker Vitasoy slumps by most in 15 months as leaked memo fans controversy and costs investors US$475 million

Name: Hong Kong’s iconic lemon tea making waves among young mainland Chinese
Uploaded: 2021-07-05T05:07:45.000Z
Duration: 2 min 15 s
Description: Hong Kong’s iconic lemon tea making waves among young mainland Chinese

The stock plunged in Monday trading, erasing US$475 million of market value, in its worst single-day loss since March 30 last year

Sell-off indicates nationalism playing out in stock market, similar to issues surrounding Xinjiang cotton and solar-panel material producers

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Vitasoy has clarified that the memo was written by a staff member without official consent and could not represent the company’s views. Photo: Winson Wong

Zhang Shidong

Published: 1:07pm, 5 Jul 2021Updated: 5:14pm, 5 Jul 2021

Vitasoy International, the Hong Kong-based beverage maker, slumped by the most in 15 months following a public backlash triggered by an internal memo seen as sympathetic to an employee described by police as a “lone-wolf domestic terrorist.”

The stock plunged 12 per cent to HK$25.95 in Monday trading and completed its worst single-day loss since March 30 last year. The stock is among those eligible for trading by onshore investors through the Stock Connect scheme, which suggests nationalism may be behind the sell-off that erased US$475 million from its market value.

The firm, which derived two-thirds of its annual turnover last year from the sale of soybean milk, tea and fruit juices in mainland China, is the latest locally-listed firm to be embroiled in political turmoil tied to national security and trade, following recent issues related to Xinjiang-produced cotton and the supply of solar-panel materials.

In the leaked Vitasoy memo that went viral on the internet last week, the company expressed its condolences to the family of a 50-year-old purchasing manager identified only as Leung, who stabbed a police officer in Causeway Bay on July 1, before killing himself.

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Hong Kong’s iconic lemon tea making waves among young mainland Chinese

The day was a double celebration marking the 24th anniversary of the city’s handover and the Chinese Communist Party’s centenary. Hong Kong’s police has described the act as lone-wolf terrorism.

The violence follows a year in which Beijing has tightened its control over Hong Kong, squelching anti-government protests with the fearsome national security legislation and stamping out political dissent. It has also snared Jimmy Lai Chee-ying, the founder of Apple Daily publisher Next Digital, and scores of opposition politicians.