Shares of Chervon Holdings Ltd. rose in their Hong Kong debut, after the power-tool supplier raised 2.96 billion Hong Kong dollars (US$379.6 million) in net proceeds from an initial public offering.
The Nanjing-based company’s stock opened 19% higher at HK$51.80, compared with its IPO price of HK$43.60 a share. Shares rose as much as 25% in early trade but have since pared gains and were recently up 22% at HK$53.00.
The maker of products including riding mowers, blowers, chainsaws and sanders under brands such as Ego, Flex and Skil said it would use proceeds to expand and upgrade production facilities. Funds will also be channeled to boost its lithium-ion battery system technology.
It has factories with an annual production capacity of more than 22 million units in China, Germany and Vietnam, it said.
Value Partners Hong Kong Ltd. and Greenwoods Asset Management Hong Kong Ltd. are among the cornerstone investors taking up about HK$1.64 billion of the offering.
The company posted net profit of US$44.4 million in 2020 on revenue of US$1.20 billion. In the first half of 2021, net profit rose 9.9% to US$86.1 million.
