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Chinese Health Firm That Just Started Selling Masks Launches IPO

Bloomberg logoBloomberg 26/03/2020 Julia Fioretti and Jeanny Yu
a plastic bag: Protective masks sit in a container on the production line at the Mask Factory Co. facility in Hong Kong, China, on Tuesday, Feb. 25, 2020. © Bloomberg Protective masks sit in a container on the production line at the Mask Factory Co. facility in Hong Kong, China, on Tuesday, Feb. 25, 2020.

A Chinese maker of medicines and health supplements that recently added surgical masks and other “anti-epidemic” products to its portfolio launched a Hong Kong initial public offering on Thursday.

Tycoon Group Holdings Ltd. is touting itself as a “top anti-epidemic pick” as it seeks to raise about HK$400 million ($52 million), according to Soochow Securities Co., one of the global coordinators on the deal.

With the coronavirus pandemic, products such as surgical masks, disinfectant and hand wipes have become hot items as both individuals and medical professionals run out of them.

Pictures: Coronavirus rattles stock markets around the world

Tycoon Group took advantage of the opportunity: in an investor presentation, it said it got exclusive rights to “anti-epidemic products” shortly after the outbreak began. The company now sells everything from wet wipes and hand sanitizers to thermometers and surgical masks, though Chinese medicine and health supplements are its top-selling categories, according to a preliminary prospectus.

It is also steering clear of the all-virtual roadshows that have become more common as the outbreak has hindered travel and human interaction. Tycoon Group is conducting investor meetings in person as well as virtually, and will hand out a gift set of anti-epidemic products at a meeting on Friday.

Tycoon is not the first company to amend its business focus since the virus outbreak. Ta Yang Group Holdings Ltd., a maker of silicon and rubber keypads, soared as much as 129% on Feb. 14 after saying it won an order to produce masks for Beijing. Ladies’ apparel producer Veeko International Holdings Ltd. and toymaker Kin Yat Holdings Ltd. also surged after saying they would transform their facilities to make masks.

IPOs in Hong Kong have slowed down due to widespread travel restrictions and extreme market volatility. Just $607 million has been raised through listings in the financial hub this month, compared with $1.39 billion in March last year, data compiled by Bloomberg show. On Tuesday, Malaysian seller of casual wear and accessories MBV International Ltd. pulled its Hong Kong IPO because of the volatile market conditions, IFR reported.

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