The Latest: Gold product designer, manufacturer and seller Laopu Gold Co. Ltd. (6181.HK) opened at HK$64.5 in their Friday trading debut, 59.3% higher than their IPO price of HK$40.50, with a market capitalization of about HK$5.74 billion ($735 million).
Looking Up: The local portion of the company’s public offering in Hong Kong was oversubscribed by 581 times, which reflects enthusiastic public response.
Take Note: According to the clawback mechanism, even with 50% of total shares allocated to the local portion of public offering, most retail investors who subscribed for its shares may end up disappointed, getting only 3.39% of each 500-share lot.
Digging Deeper: Laopu, whose name means “Old Gold Shop,” is a relatively recent industry entrant, founded in 2009 by Xu Gaoming. Xu started Laopu by opening his first boutique specializing in traditional gold jewelry through his company Golden Treasury. The brand registered the Laopu Gold trademark in 2014 and was formally incorporated in 2016, transitioning the gold business along with associated assets and liabilities from Golden Treasury to the new entity. By the close of 2023, Laopu had expanded its footprint to 32 boutiques across 13 cities in Mainland China, predominantly in first-tier urban centers. Over the past three years, its revenues have continued to rise, with a compound annual growth rate of 58.6%.
Market Reaction: Laopu extended its gains after the strong opening on Friday, finishing up 63.2% at HK$66.1 by the midday break.
Translation by A. Au
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