Shares in Chinese bottled water company Nongfu Spring surged on their debut in Hong Kong, propelling founder Zhong Shanshan into the position of China’s second-richest man with a fortune of over $50bn.

Nongfu’s stock jumped 63 per cent to HK$35.10 in Tuesday morning trading after the company, whose red-capped plastic bottles are a fixture of official gatherings in China, raised more than $1bn in its IPO this week.

The pop in Nongfu’s stock pushed the value of Mr Zhong’s 84 per cent stake in the company to $42.7bn, according to a Bloomberg estimate. Combined with his $9.4bn stake in Beijing Wantai Biological Pharmacy Enterprise, a maker of Covid-19 test kits, and cash and other assets of $1bn, Mr Zhong’s net worth is now $53.4bn.

Mr Zhong’s fortune now tops that of Pony Ma, the founder of Chinese internet group Tencent, who is currently worth $52.1bn, according to Bloomberg estimates. Jack Ma, the founder of ecommerce business Alibaba, remains China’s richest man with an estimated worth of $57.8bn.


$53.4bn


Net worth of Nongfu Spring’s founder after Hong Kong IPO

The Nongfu IPO nearly trebled the net worth of Mr Zhong, a former construction worker and journalist who founded Nongfu in 1996. Prior to the Hong Kong offering his fortune stood at $18.9bn.

More than 700,000 retail investors in Hong Kong submitted orders totalling HK$670.8bn ($86bn) for the retail portion of Nongfu’s share offering, making it 1,148 times oversubscribed.

Research cited in Nongfu’s prospectus showed that retail sales in China’s bottled water market rose to Rmb201.7bn ($29.5bn) in 2019, with Nongfu enjoying a 20 per market share — the largest of any company. The market is expected to grow at an average annual rate of more than 10 per cent between now and 2024, according to research firm Frost & Sullivan.

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Traders and brokers said retail demand for the offering pointed to huge demand for listings of Chinese companies.

Businesses from the world’s second-biggest economy have raised billions of dollars in Hong Kong this year against a backdrop of rising tensions between Beijing and Washington.

The Trump administration has proposed forcing Chinese companies to delist from New York exchanges if US regulators are not given access to audit reports.

Ant Group, the Alibaba-backed Chinese payments business, is also expected to sell up to $30bn worth of shares in Hong Kong and Shanghai this year in what could be the world’s largest-ever IPO.

Hong Kong’s Hang Seng index was up 0.6 per cent on Tuesday morning.

Via Financial Times