Mainland stroller manufacturer Goodbaby International Holdings zoomed up yesterday on its trading debut as investors scrambled to add exposure to a niche segment of China's domestic market.
Goodbaby is a leading provider of strollers on the mainland and in overseas markets such as the United States and Europe. It has also expressed interest in expanding production of other children's care products.
'The story is a pretty good story because of the potential market in China,' said Ben Kwong Man-bun, chief operating officer of securities firm KGI Asia. 'The share price fared quite well but the valuation is not cheap at all at this level so further upside will be relatively small.'
Goodbaby jumped as much as 25.9 per cent in the morning before finishing the day up 18.4 per cent at HK$5.80. It was the fifth-largest gainer in the Hong Kong market yesterday and about HK$2 billion worth of stock changed hands.
The initial public offering will yield about HK$900 million in net proceeds for Goodbaby after it sold 201 million shares at HK$4.90 each. An additional 99 million shares were sold by a shareholder, bringing the total size of the deal to nearly HK$1.5 billion.
Goodbaby planned to pump about 30 per cent of its offer proceeds into capital expenditures to increase production and staff quarters, according to a pre-listing document. It also earmarked funds for research and development and the expansion of its distribution network.
