Stella International stock climbs after debut in HK

Shares of Taiwan-based Stella International Holdings Ltd (九興控股), a shoe supplier for brands such as Givenchy, climbed on its first trading day in Hong Kong after the stock was priced at the top end of the range.

The stock closed HK$2.94, or 19 percent, higher at HK$18.44 yesterday. Stella's initial public offering raised HK$3.02 billion (US$387 million) by pricing 195 million shares, a 25 percent stake, at HK$15.50 each, valuing the company at US$1.5 billion. International institutions sought 25 times the shares available to them.

"We're excited, but today is just a starting point," chairman Jimmy Chen (陳建民) said yesterday in Hong Kong. "We expect the company will grow 20 percent in the next three to five years."

Chen said Stella, which was founded in 1982, was in talks to acquire two companies that sell brand-name men's and women's shoes internationally.

He declined to name the acquisition targets.

Stella's revenue jumped 16.5 percent to US$779.3 million over the past 12 months, while profit rose 7 percent to US$91.4 million. North America accounted for 62.3 percent of Stella's revenue last year and Europe 28.4 percent. Sales in China and Hong Kong contributed 2.9 percent.

Another Taiwan-based company also saw shares rise on its Hong Kong debut on Friday.

Shares of Delta Networks Inc (達創科技), a maker of communications equipment for customers including Alcatel Lucent and Nortel Networks Corp, surged on their first day of trading in Hong Kong after the company said production capacity may double in five years.

The stock rose 20.9 percent to HK$5.44 at the close of trading, after climbing as much as 33 percent earlier. The company and its shareholders raised about HK$1.4 billion selling shares at HK$4.50 each, the top end of an indicative range.

Taipei-headquartered Delta Networks, which makes products such as ethernet and broadband Internet switches, will invest about US$50 million in the next five years in a new factory in Wujiang, eastern China, which will double production capacity, company president Victor Cheng (鄭安) said in an interview yesterday.

The company has factories in Taoyuan, Taiwan, and Dongguan, southern China.

Delta Networks, a unit of Taipei-listed Delta Electronics Inc (台達電子), said profit rose 64 percent last year to US$25.5 million as sales increased 23 percent to US$357.4 million, according to its listing prospectus.

The company will also use about HK$393 million from its listing proceeds to seek acquisitions, the document said.