China pork giant WH Group gains 10.6% on HK debut

The stock jumped to $6.86 as share around 9.30 am on Tuesday from the offer price of HK$6.20; at the time of this report, the stock was trading at HK$6.60 a share. The IPO - which saw WH Group sell 2.56 billion shares - was moderately over-subscribed for the institutional tranche, however local retail investors asked to buy more than 50x times the shares offered. It was third largest IPO in Asia this year.

The offering valued the firm at about 11.5x estimated earnings for this year, compared with the 15 to 20x earnings targeted in April when the company initially tried to raise HK$41 billion but eventually scrapped its plans due to a weak response.

None of the existing shareholders sold shares in the offering. CDH holds a 38.1% interest in WH Group, having first invested $250 million in the company alongside Goldman in 2006. The latter's stake has since been pared back to 5.18%, while New Horizon Capital owns 4.15%, Temasek Holdings has 2.76% and Kerry Holdings 7.4%.

WH Group - which changed its name from Shuanghui International Holdings after it acquired US-based Smithfield Foods for $4.7 billion in 2013 - claims to have the number one market shares across China, the US and several key markets in Europe.

With both the Shuanghui and Smithfield operations, the group owns Asia's largest animal protein company and US's largest pork firm, respectively. It also has a 37% stake in Campofrio, one of the largest European packaged meat companies.

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• Topics
• Consumer
• Greater China
• Agriculture
• Consumer
• CDH Investments Management
• Goldman Sachs
• New Horizon Capital
• Hong Kong (China)
• China