CR Beverage aims to raise $5b amid market volatility

June Chen

China Resources Beverage launched its initial public offering yesterday to raise up to HK$5.04 billion - the largest new listing in Hong Kong this year - as beverage shares took a beating, including those of its sister company China Resources Beer (0291) which plunged 12.8 percent.

The company, which produces bottled water under the Cestbon brand, commanded the lion's share in the China's purified drinking water market last year.

It priced its shares between HK$13.5 and HK$14.5 apiece, with the minimum investment being HK$2,929.24 per board lot for 200 shares.

The company plans to go public next Wednesday and it will close retail orders this Friday.

In China's over 200 billion yuan packaged drinking water market, C'estbon accounted for 18.4 percent market share in 2023.

The IPO launch came as Ernst & Young said the IPO market in the city is recovering.

But in the beverage sector, shares of CR Beer slumped by 12.8 percent to HK$29.45 apiece, the worst performing blue chip of the day, as market watchers said beer consumption over the National Day holidays was sluggish and the industry will now see in an off-peak season after summer.

Other beverage stocks fell amid the volatile broader market, as the Hang Seng Index once dropped as much as 938 points before closing 774 points lower at 20,138 points.

China Mengniu Dairy's (2319) shares fell by 7.3 percent to HK$16.14, and Nongfu Spring (9633 ) eased by 5.3 percent, closing at HK$30.15.

Hong Kong beverage company Vitasoy's (0345) shares also fell 4 percent even though Robert Ng Chee-siong's brother increased their stake.

Far East Organisation's chief executive Philip Ng Chee-tat, the brother of Sino Land (0083) chairman Robert Ng, built his positions in Vitasoy last week, with his shareholding rising from 5.85 percent to 6.43 percent, on purchases worth HK$37.99 million.

He invested in Vitasoy through a Singaporean beverage company Yeo Hiap Seng and Ng's family office.

In other news, Taiwanese container shipping company TS Lines passed its listing hearing on the Hong Kong Stock Exchange, with JP Morgan and China Merchants Securities International as joint sponsors. It will become the first Taiwanese shipping company to be listed in Hong Kong.