Bottled water IPO makes founder China’s third-richest person as shares surge on debut

Shares of the bottled-water maker jumped as much as 85% and closed up 54% in Hong Kong. The debut was the city’s fourth best on record among firms that raised more than $1 billion.

The surge has pushed the net worth of Zhong Shanshan, who owns 84% of the company he founded in 1996, to $51 billion, according to the Bloomberg Billionaires Index. He’s now the wealthiest person in China after Alibaba Group Holding Ltd.’s Jack Ma and Tencent Holdings Ltd.’s Pony Ma.

The initial public offering was a smash hit in Hong Kong, so much so that the retail portion was oversubscribed by more than 1,100 times and Nongfu increased the number of shares allocated to the public. That was after it priced at the top end of a marketed range.

Despite the coronavirus outbreak, the IPO market in China and Hong Kong has remained vibrant this year. Companies raised almost $60 billion via new share sales in 2020, more than double from the same period in 2019, data compiled by Bloomberg show. Hong Kong is becoming an increasingly popular listing venue amid U.S.-China tensions, while demand from retail investors has been surging as ample liquidity encouraged banks to lend. In China, IPOs produced at least 24 new billionaires in the first half of the year.

Zhong, also known by the local media as the Lone Wolf for eschewing business groups and politics, is the only tycoon among China’s five richest people who isn’t from the tech or real estate industry, which typically dominate the ranking. His fortune was boosted in April when Beijing Wantai Biological Pharmacy Enterprise Co., a company he acquired a controlling stake in almost two decades ago, went public in Shanghai. The stock has surged almost 2,150% since then.

That’s quite a turnaround for a man whose schooling got interrupted during the nation’s Cultural Revolution and who worked in construction and in journalism before turning to bottled water. Now Zhong is sharing his success: The Nongfu listing is also creating at least 68 new millionaires. Dozens of them became shareholders just last year, when Zhong and his holding company transferred 0.79% of Nongfu as part of a staff incentive program.

Jack Ma has topped the list of China’s richest people for most of the past six years, after Alibaba went public in the U.S. The listing of his Ant Group is poised to boost his fortune further -- his stake would be worth $25 billion if it achieves the $225 billion valuation people familiar with the matter have said it’s targeting.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.