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Hong Kong’s most overbought IPO Nongfu Spring gushes on debut, pushing founder to among China’s newly minted billionaires

  • Company’s shares surged 85 per cent in early trading from IPO price of HK$21.50
  • Debut made Nongfu founder Zhong Shanshan one of China’s richest people

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Zhong Shanshan, the 65-year-old founder and controlling shareholder of Nongfu Spring, in an undated photo. Photo: WEIBO
Yujing Liu
Shares of Chinese bottled water giant Nongfu Spring soared in early trading on their debut on Tuesday, after receiving an overwhelming response from retail investors in Hong Kong, boosting the fortunes of Zhong Shanshan, its low-profile billionaire founder.
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The company, which is based in China’s eastern city of Hangzhou, saw its shares surge 85 per cent to HK$39.80 in market debut from an initial public offering price of HK$21.50. As many as 224.9 million shares valued at HK$8 billion (US$387 million) changed hands on the company’s first trading day.

The stock, however, failed to replicate a 105 per cent jump achieved on Monday, in the so-called grey market trading before its formal debut. It gave up some of the early gains to end the day 54 per cent higher at HK$33.10.

Nongfu Spring achieved a record-breaking IPO in Hong Kong after it locked up as much as HK$677 billion – about a third of Hong Kong’s daily cash in circulation – in subscription capital from enthusiastic small investors. Overall, the retail tranche of its offering was overbought 1,147 times. It has raised HK$8.35 billion in IPO proceeds.

The flotation has added about HK$313 billion in paper wealth to 65-year-old Zhong’s wealth, based on the close price of Nongfu shares. The billionaire controls 9.4 billion shares, or 84 per cent, of the company. He holds a 17 per cent direct stake in Nongfu and controls another 67 per cent through Yangshengtang, a company entirely owned by him.

Zhong is also the biggest shareholder of Beijing Wantai Biological Pharmacy Enterprise, a maker of Covid-19 test kits that went public in Shanghai in April. His 75 per cent stake in that company was valued at 64 billion yuan (US$9.4 billion) based on Tuesday’s closing price.

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