Eye care firm surges 430% in first week

Hong Kong-based C-Mer aiming for growth by opening more new hospitals

C-Mer Eye Care Holdings Ltd surged 58.27 percent, or 5.67 points, to finish at HK$15.4 ($1.97) on Thursday, as the Hong Kong medical services company announced plans to step up investment on the Chinese mainland.

The gain represented a 430 percent jump from its initial public offering price when it was listed on Hong Kong's stock market on Monday.

The company said it would use the capital to set up three new eye hospitals in the country and seek to possibly acquire three existing eye hospitals there.

"In addition to one that will open soon in Beijing, we are going to open two more hospitals this year-one in East China, probably in Shanghai or Hangzhou, and the other in central or western parts of the country," Dennis Lam Shunchiu, director of C-Mer, told reporters in Shenzhen on Thursday.

The Beijing hospital will come into operation this month, marking C-Mer's second investment on the Chinese mainland following the first in Shenzhen in 2013.

The company will further step up expansion next year by establishing four more hospitals in the country, Lam said.

Of the acquisition plan, he said, "The company is working on the matter. Hopefully we can have one (acquisition) in the first half of this year and another in the second half," without giving more details.

He added that the Guangdong-Hong Kong-Macao Greater Bay Area will also be a focus of the company's future development.

C-Mer won overwhelming popularity among investors when it made its debut on the Hong Kong Stock Exchange earlier this week. Its IPO was oversubscribed by more than 1,500 times, taking the crown as the most popular new stock with a market capitalization of $50 million or more among retail investors in 11 years. It is widely believed that mainland's internet giant Tencent Holdings Ltd Chairman Pony Ma Huateng's link to the company is a major reason for the company's price hike. The company counts Ma as one of its cornerstone investors.

Kevin Leung, director of global investment strategy at Haitong International Securities, said there are not many ophthalmology-related stocks on the Hong Kong Stock Exchange at the present time, which offers C-Mer a "scarcity premium".

"C-Mer has good fundamentals, but the company's current share prices have far deviated from its valuation," Leung said. "We cannot rule out the possibility of speculation on the 'Ma Huateng-concept' stock. There is a high possibility that the stock could go through an adjustment in the short term."

Evelyn Yu in Hong Kong contributed to this story.