NBA Player Sponsor Peak Sport’s Hong Kong IPO Falters

"NBA Player Sponsor Peak Sport’s Hong Kong IPO Falters | AboutHK.Com - More Information About HK"

Bloomberg Peak Sport Products Co., the Chinese sportswear maker that sponsors basketball players including Shane Battier and Jason Kidd, became the latest company to slump on its first day of trading in Hong Kong today. Peak Sport shares lost 17 percent to HK$3.40 at the close of trade in Hong Kong. The initial offering price was set at HK$4.10 and was 20 times oversubscribed. China Lilang Ltd., owner of the nation’s biggest men’s clothing brand, and Metallurgical Corporation of China Ltd., which builds steel mills and also helped construct Beijing’s “Bird’s Nest” Olympic stadium, also fell on their first day of trading last week, signaling the market’s appetite for share sales may be sated. “It’s not like 2007, that’s the bottom line,” said Nicholas Yeo, head of China and Hong Kong equities at Aberdeen Asset Management Group. “Back then the market could go up quite easily and IPOs were rife, but now the market doesn’t have that kind of confidence. People are still concerned about the real economy - is it actually recovering?” In 2007 the Hang Seng Index climbed to a record high of 31,638.22 as companies including Aluminum Corp of China and China’s largest banks sold shares to the public in Hong Kong or Shanghai and quickly climbed to the top of rankings for the world’s largest companies. The Hang Seng climbed 2.1 percent to 21,013.87 at the close of trade in Hong Kong. China Sportswear Rising consumer spending in China has spurred other sportswear makers and distributors such as Anta Sports Products Ltd. and China Dongxiang Group Co. to raise capital in Hong Kong to expand production and store networks at home. The nation’s sportswear market is expected to expand at an annual average of 18 percent to 149.1 billion yuan ($22 billion) by 2013, according to an estimate by ZOU Marketing Inc., a Shanghai-based provider of sports branding services, quoted in a Credit Suisse report on Peak Sport dated Aug. 28. Peak Sport had nearly 5,670 stores, 95 percent of them in smaller Chinese cities, by the end of June, the Credit Suisse report said. It more than doubled the size of the network in the two-and-a-half years to June, it added. The company sponsors National Basketball Association athletes including the Houston Rockets’ Battier and Dikembe Mutombo along with Kidd from the Dallas Mavericks. The company, better known for its basketball shoes, ranked alongside Nike Inc. and Li Ning as one of three most-recognized sports footwear brands in China, Credit Suisse said, quoting a November 2008 survey. Peak Sport traces its roots to a business set up by 53- year-old founding Chairman Xu Jingnan in 1988. Its profit more than doubled last year to 375.9 million yuan with total sales of 2 billion yuan, according to the Credit Suisse report. To contact the reporter on this story: Patrick Rial in Hong Kong at prial@bloomberg.net This e-mail address is being protected from spambots. You need JavaScript enabled to view it .