Chinese toy maker Pop Mart’s valuation doubles to $14b in Hong Kong trading debut

Source: Pop Mart

Chinese toy maker Pop Mart International Group, seller of the renowned ‘Molly’ doll and figurines wildly popular among China’s cashed-up millennials, is now worth $14 billion after its stock price doubled in its Hong Kong trading debut on Friday.

The Beijing-based company’s shares opened 100% higher in their first session on Friday, continuing a run of strong first-day performances for deals in the city.

Pop Mart raised $676 million in an initial public offering (IPO) which gave the company a valuation of $7 billion ahead of the trading debut.

With the price doubling, the company is worth at least $14 billion and the firm’s founder Wang Ning, 33, is a now billionaire with his 56% stake.

Pop Mart sells most of its toys in mystery boxes, meaning shoppers at its 136 mainland China stores and 1,001 vending machines do not know which figurine they get until opening the box. The attraction of the toys even lured the normally serious bankers who worked on the deal.

“I bought a lot,” said one dealmaker who could not be identified as he was not authorised to speak to media.

The company priced its IPO shares at HK$38.50 in a deal that was hotly contested by institutional and retail investors.

Pop Mart’s shares opened at HK$77.10, outpacing the broader Hang Seng Index which is trading up 0.37% in the final session of the week. It is Friday’s most actively traded stock by turnover on the Hang Seng.

The share-price surge puts the stock among the best-performing debutants for the city on record for deals over $500 million, Refinitiv data showed.

Just this year, Smoore International Holdings Ltd stock shot up 150% on debut in July, Nongfu Spring Co Ltd gained as much as 85% in September while JD Health International Inc gained 56% when it debuted on Tuesday.

GEO Securities Chief Executive Francis Lun said the first day ‘pop’ of IPOs in Hong Kong was driven by investors taking on leverage to buy into deals.

“There is so much money chasing these deals, sooner rather than later these punters are going to hit a rough spot and they will realise that they can lose money on some deals,” he told Reuters.

“The problem is people are too optimistic, they take on a lot of leverage, interest rates are low and they think every deal will make money.”

There have been deals in Hong Kong this year that have failed to rise on the first day, especially in the property services sector.

KWG Living Living Group Holdings Ltd lost 23% while Shimao Services Holdings Ltd and First Service Holding Ltd dropped 23% and 27% respectively on their recent debuts.

Pop Mart’s main product is “mystery” toy boxes that each hold a single figurine from different collections. Its best-selling character is the round-faced Molly doll.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.