Rise in Luyuan Group Holding and Shiyue Daotian Group Shares on Hong Kong Stock Exchange

By Sherry Qin

The Hong Kong Stock Exchange saw a positive debut for Luyuan Group Holding and Shiyue Daotian Group, signaling a potential revival in the market for initial public offerings (IPOs).

Luyuan Group Holding, a prominent electric-motorcycle manufacturer, experienced a 9.2% surge on Thursday, reaching 8.05 Hong Kong dollars ($1.03) from its IPO price of HK$7.37. Similarly, food company Shiyue Daotian recorded a 14% gain, rising to HK$17.54, after touching HK$19.94 earlier.

KPMG, in a research report, identified persistently high interest rates and slow economic growth as the pivotal factors dampening the IPO market in Hong Kong.

Compared to the previous year, the first three quarters of 2022 witnessed a decline of 65% and 15%, with 44 listings raising HK$24.6 billion.

Nonetheless, KPMG anticipates an accelerated pace of Hong Kong IPOs toward the end of the year, estimating approximately 110 active IPO applicants.

Shiyue Daotian, headquartered in Beijing and known for its pre-packaged food products, successfully raised HK$820.3 million through its public offering. The company intends to utilize the net proceeds to strengthen collaboration with suppliers and expand production capacity.

According to the prospectus, Shiyue Daotian's revenue has witnessed significant growth over the past three years, almost doubling from CNY2.33 billion in 2020 to 4.53 billion yuan ($620.5 million) in 2022.

Likewise, Luyuan Group Holding, based in Jinhua in east China, observed a substantial surge in sales volume over the past three years. The company's sales volume climbed to 2.42 million units in 2022, up from 1.47 million in 2020, as stated in its prospectus.

With its Hong Kong IPO raising HK$786.1 million, Luyuan Group Holding plans to allocate the proceeds toward research and development, bolstering sales and distribution channels, and improving production capabilities.