Yum China flops in Hong Kong debut amid lingering questions about strategy for KFC, Pizza Hut to overcome Covid-19 slump
- Shares of the Shanghai-based company began trading at HK$410, a slight discount to the HK$412 that they were offered at in their HK$17.27 billion (US$2.23 billion) secondary listing on the Hong Kong stock exchange
- The stock fell by as much as 6.3 per cent to an intraday low of HK$386.20 in recent trading, ending the day at HK$390.20
Yum China Holdings, the owner of the KFC and Pizza Hut restaurant chains in China, got off to a bumpy start in its Hong Kong trading debut when its stock became the first in a long while to open at a loss.
Shares of the Shanghai-based company began trading at HK$410, a slight discount to the HK$412 that they were offered at in their HK$17.27 billion (US$2.23 billion) secondary listing on the Hong Kong stock exchange. The stock fell by as much as 6.3 per cent to an intraday low of HK$386.20 in recent trading before ending its first trading day at HK$390.20 to record an unusual loss for retail investors who have subscribed to it.
“The first-day performance was slightly below market expectations, but it would not damp investors’ enthusiasm in secondary listings,” said He Yan, a hedge fund manager with Shanghai Shiva Investment. “Companies with strong consumer awareness on the mainland are among the favourite stocks for Chinese investors.”
Yum China’s offering comes as restaurants worldwide are still struggling with social distancing regulations to contain the global coronavirus pandemic.