. . . and before you ask that isn’t a reference to the late Michael Jackson’s pet chimp, but China’s latest runaway IPO.
From FT.com:
Bawang International, a Chinese herbal shampoo maker, shined on its market debut in Hong Kong on Friday, with the shares rising as much as 34 per cent in spite of a falling market. The company, which uses movie star Jackie Chan in its advertisements, was trading up 30 per cent at HK$3.10 at midday. The group raised HK$1.67bn (US$215m) by selling a 25 per cent stake at HK$2.38 a share.
The float was hugely oversubscribed according to Thomsonwire Reuters:
Bawang’s retail public offering portion was 446 times subscribed and the company priced its HK$1.67 billion ($213.6 million) IPO at the top end of the indicative range. “That’s the way the Hong Kong market functions; when something is hot everyone wants a piece of it,” said Jackson Wong, investment manager with Tanrich Securities.
Herbal shampoo, hot? Have we missed something?
It seems we have.Although the PRC’s hair-care market has expanded rapidly in recent years, it remains relatively under-developed when compared to developed countries.
The average hair-care products consumption per capita in China in 2007 was only 0.30 liters per year, which is still much lower than developed Western and Asian countries. Consumers’ increasing emphasis on health consciousness and pursuit of natural and healthy products has driven the growth of sales for Chinese herbal hair-care products, especially for Chinese herbal shampoo products.
Retail sales of Chinese herbal shampoo are expected to continue to grow at a CAGR of 14.7% from 2007 to 2012, which demonstrates enormous market potential in the next decade.
That was from Bawang’s intention to float statement, which is full other amazing facts and figures about the Chinese hair care market.
And finally, a picture of a satisfied customer.
