(Bloomberg) — It was the hottest IPO in town. Now Nongfu Spring Co.’s stock surge is turning its founder into China’s second-richest person.
Shares of the bottled-water maker jumped as much as 85% and traded up 55% by the midday break in Hong Kong. The debut is on pace to become the city’s fourth best on record among firms that raised more than $1 billion.
The surge is pushing the net worth of Zhong Shanshan, who owns 84% of the firm he founded in 1996, to more than $51 billion, according to the Bloomberg Billionaires Index. He’s now the wealthiest person in China after Alibaba Group Holding Ltd.’s Jack Ma, and the third richest in Asia.
The initial public offering was a smash hit in Hong Kong, so much so that the retail portion was oversubscribed by more than 1,100 times and Nongfu increased the number of shares allocated to the public. That was after it priced at the top end of a marketed range.
Despite the coronavirus outbreak, the IPO market in China and Hong Kong has remained vibrant this year. Companies raised almost $60 billion via new share sales in 2020, more than double from the same period in 2019, data compiled by Bloomberg show. Hong Kong is becoming an increasingly popular listing venue amid U.S.-China tensions, while demand from retail investors has been surging as ample liquidity encouraged banks to lend. In China, IPOs produced at least 24 new billionaires in the first half of the year.
Zhong, also known by the local media as the Lone Wolf for eschewing business groups and politics, is the only tycoon among China’s five richest people who isn’t from the tech or real estate industry, which typically dominate the ranking. His fortune was boosted in April when Beijing Wantai Biological Pharmacy Enterprise Co., a company he acquired a controlling stake in almost two decades ago, went public in Shanghai. The stock has surged more than 2,100% since then.
That’s quite a turnaround for a man whose schooling got interrupted during the nation’s Cultural Revolution and who worked in construction and in journalism before turning to bottled water. Now Zhong is sharing his success: The Nongfu listing is also creating at least 68 new millionaires. Dozens of them became shareholders just last year, when Zhong and his holding company transferred 0.79% of Nongfu as part of a staff incentive program.
Jack Ma has topped the list of China’s richest people for most of the past six years, after Alibaba went public in the U.S. The listing of his Ant Group is poised to boost his fortune further — his stake would be worth $25 billion if it achieves the $225 billion valuation people familiar with the matter have said it’s targeting.
(Updates for stock move throughout, adds table)
bloomberg.com” data-reactid=”41″>For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.” data-reactid=”42″>Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.
