Shares in Topsports International Holdings rose nearly 8% on debut in Hong Kong on Thursday after China’s largest sportswear manufacturer raised $1.0 billion in an initial public offering (IPO) last week.
The stock of the Shenzhen-based company climbed to HK$9.16, compared to the IPO price of HK$8.50 ($1.08) which had given it a market capitalisation of about $6.74 billion.
The broader Hong Kong stock market was up 0.4%.
The performance of Topsports shares will be closely watched as a test of investor sentiment given new stock issuance on the Hong Kong share market has slumped 44.4% so far in 2019 compared to the same period last year, according to Refinitiv data.
The fall has been attributed by bankers and analysts to negative investor sentiment created by the political unrest that has gripped Hong Kong.
Topsports distributes and is a retail partner of global sportswear makers Nike Inc and Adidas AG.
As part of the IPO, Topsports has the right to exercise an over-allotment option, known as a green shoe, to raise up to $1.2 billion. The IPO was sponsored by Bank of America and Morgan Stanley.
Topsports previously said it would use nearly 27% of the IPO proceeds to repay short-term bank loans and 45% to repay debt to parent Belle International Holdings Ltd.
The IPO followed that of Budweiser Brewing Company, which raised $5 billion on Sept. 24 in the world’s second-largest IPO this year. Budweiser’s shares have risen to HK$32.40 from the HK$27.0 issue price.