According to one business directory, Shanghai Kaikai Industrial Co Ltd is a Chinese manufacturer and seller of shirts, woollen sweaters, cotton knitted goods, clothing, shoes, hats and textile products. Its clothing is offered under the Kaikai brand name.
The Shanghai-based company is also engaged in the operation of department stores, including the sale of hardware and electrical appliances, handicrafts, leather goods, glass products and rain gears, as well as product consultation, after-sales services and the lease of houses.
Another register adds that Shanghai Kaikai has also branched out into “the production of Chinese and Western medicine, rental of apparels and provision of advertising services.”
Yes, it’s a mundane, have-a-go-at anything Asian conglomerate.
Except that its share price proved anything but mundane on Tuesday: the stock closed 238% higher at 14.3 yuan, capitalising this oddity at a little over $400m.
Why the excitement? Well Shanghai Kaikai has become the latest Chinese company to implement the government-sponsored share reform plan, which is aimed at wiping out the overhang of state-owned non-tradeable shares that sit on the register of many Shanghai-listed firms. Trading in Shanghai Kaikai has been suspended since January – so, on its return, some catching up was in order. The price all but tripled.
Did this turn any heads? Not locally, apparently. Third-line industrials are all the rage right now, with investors turning their backs on Chinese mega-caps, looking instead for every-more volatile trading opportunities.
On Tuesday, according to Shanghai Securities News (via Reuters) a Shanghai manager called Hua An Fund Management, which plans to concentrate on small caps, raised its planned maximum of 10bn yuan ($1.2bn) in a single day — but not before local phone banking systems collapsed at several banks as local punters rushed to transfer 30bn yuan in, hoping to secure a Hua An subscription.
That’s a lot of money chasing the likes of Shanghai Kaikai. No wonder the price went up.