Key Takeaways:
- Shiyue Daotian has sizzled in the week since its trading debut, as investors bet on its position as one of China’s top premium rice sellers
- The company’s pre-IPO backers include such big names as HongShan and Mubadala Capital, owned by Abu Dhabi’s sovereign wealth fund
By Edith Terry
Shiyue Daotian Group Co. Ltd.’s (9676.HK) impressive post-IPO gains, including a 23% jump on its trading debut a week ago, is partly a matter of timing. The family-controlled premium rice seller, which raised HK$820.3 million ($105 million) in the listing, has just a 15% free float, making its shares relatively scarce. The IPO also came just as Chinese sovereign wealth fund Huijin Trust increased its holdings in China’s four biggest banks, sparking a rally for the broader Hong Kong stock market.
But while the brief Hong Kong stock rally quickly ran out of steam as investors worried about the Chinese economy, Shiyue Daotian’s stock continued to sizzle. At the Thursday close this week, the stock was up more than 60% from its IPO price of HK$15.36 in its first week of trading.
As China’s largest vendor of rice, whole grains, beans and seeds over e-commerce channels between 2019 and 2022, the company certainly has an appetizing story to tell. Its market share on e-commerce channels based on revenue was 14.2% in 2022, 2.7 times larger than its nearest competitor, according to its IPO prospectus.
Its sales through grocery stores have also expanded quickly, recording 79.5% annual revenue growth between 2020 and 2022, making it the country’s fourth largest company in its product category. Among the top five players in China’s pantry staple food market, it was the fastest growing company from 2020 to 2022.
Shiyue Daotian has attained its impressive growth partly by keeping a close eye on consumer trends for premium rice, from growing popularity for rice in bottles that show the consumer just how much water to add, to fondness for blackberry rice and low glycemic ...