HONG KONG: Shares of mainland sportswear retailer 361 Degrees International surged as much as 19 percent on its Hong Kong stock market debut yesterday.

The stock jumped from its initial public offering price of HK$3.61 to HK$4.28 in the morning session, but ended the day at HK$3.89, a gain of 7.8 percent.

The benchmark Hang Seng Index finished down 0.8 percent at 18,378.73 points yesterday.

The company's global offering of 500 million shares was oversubscribed, with an expanded 150 million shares offered in Hong Kong and 350 million allocated overseas.

The Fujian-based company raised HK$1.8 billion ($233 million) from the second-largest Hong Kong IPO this year by selling 25 percent of its stake. The final price values 361 Degrees at HK$7.2 billion, or 8.7 times its earnings in the year to June 2010 as estimated by Merrill Lynch. The company said the proceeds will be used to expand its retail network, raise brand awareness and invest in new production facilities.

361 Degrees priced its IPO towards the mid-point of a HK$3.15 to HK$4.35 range.

Herbal shampoo maker Bawang International completed a fundraising last Friday, pricing at the top of its indicative range after it received HK$1.67 billion for its 700 million shares. The retail tranche was reportedly more than 400 times subscribed and the institutional level was 40 times oversubscribed.

Meanwhile, China Qinfa, a coal-trading and transport company, raised HK$630 million in its recent Hong Kong IPO. Its trading debut is set for Friday.

361 Degrees is a producer of sports shoes, clothing and accessories, and sells them through 5,900 retail outlets in 31 provinces on the mainland, it said in a prospectus.

It took 4.2 percent of the mainland's sportswear market share last year, making it the eighth-largest player, after international rivals Nike Inc and Adidas AG, as well as domestic competitors Li Ning Co and Anta Sports Products Ltd, according to 361 Degrees.

(HK Edition 07/01/2009 page4)