HONG KONG, Aug 5 (AFP): Chinese pork giant WH Group, which scrapped an initial public offering worth more than $5 billion earlier this year, saw a strong Hong Kong trading debut Tuesday after its shares closed up more than seven per cent.
Shares in the world's biggest pork firm closed at HK$6.66 ($0.86), 7.42 per cent higher than its offering price of HK$6.20 per share, after raising $2.05 billion.
WH Group had cancelled a planned listing in the city in April blaming "deteriorating" market conditions, but analysts attributed the move to a lack of appetite for the firm.
WH Group had initially said it wanted to raise $5.3 billion, which would have been the biggest IPO globally for a year and Hong Kong's largest since 2010.
It later slashed the valuation of its listing by two thirds to $1.88 billion before it was cancelled, blaming concerns about the strength of the city's stock market.
Analysts have said there is potential for the stock to rise in the near future, helped by the importance of the pork industry in mainland China and after WH shed its share price.
"The pork industry is very important in China, the demand is there and among all the pork producers that are listed in Hong Kong, WH Group has better fundamentals and better operating data," Tanrich Securities vice president Jackson Wong told AFP.
Investors hope to see WH Group bring the Smithfield brand into mainland China, Wong said, adding this contributed to the group's strong trading debut.
A cost-per-share price cut from the group's previous attempt to list at HK$8-12 dollars to HK$6.2 was also "very attractive to investors", he said.
The company had said in its prospectus that its net profit for the first quarter of 2014 was $407 million, up from $125 million from the same quarter a year earlier.
The decision to pull its IPO in April was a blow to Hong Kong's stock exchange, which has been struggling to regain its appeal as a public listings destination after being eclipsed by other bourses.
