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Belle, HK get off on right foot
By Hui Ching-hoo (China Daily)
Updated: 2007-05-24 08:39 Shares of Belle International Holdings Ltd, the mainland's largest women's shoe company, surged 31 percent in its Hong Kong debut yesterday. Belle's shares closed at HK$8.14, compared with its initial public offering (IPO) price of HK$6.2. The retail tranche of Belle's IPO, earmarked for individual investors, was 516 times oversubscribed, surpassing the previous record held by the Industrial and Commercial Bank of China and making it the most popular IPO in Hong Kong ever. The international tranche of Belle was more than 50 times oversubscribed. Though Belle shares had been traded between HK$8.8 and HK$9 in the grey market the previous day, yesterday they opened at a lower level of HK$8.4.
The price edged up in the morning session, peaking at HK$8.45. The rally later lost momentum and the share eventually closed at HK$8.14. A total of 700 million shares changed hands, generating a turnover of HK$5.79 billion. Patrick Yiu, CASH Asset Management associated director, said the surge was within market expectations. "The share was priced pretty high compared to its asset value, so the 30 percent appreciation was reasonable." He also said Belle's solid debut showed local investors are still in favor of mainland retailers as the mainland transforms into a service- and consumption-driven economy. "It's very clear that consumption products will be in the market spotlight," he said. Sheng Baijiao, executive director of Belle, said he is satisfied with the stock's performance. He said the company's revenue would not be eroded by the increasing rent. "The growth in turnover will offset the rental cost. Further, the appreciation of the yuan could help boost our business." Sheng shrugged off the impact of the People's Bank of China's cooling measures. "The purpose of the policy is to prevent the mainland property and securities market from overheating. It won't pose any damage to the retail market." He also said the company has no plans to go public in the A-share market. Belle made its IPO offer to sell 1.4 billion shares in a bid to collect HK$8.7 billion. The company has high hopes on the mainland retail market, where it plans to open more than 1,000 stores a year. (For more biz stories, please visit Industries)
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