HYPEBEAST LTD., the collection of fashion and entertainment blogs that started out as an online sneaker forum, had the best debut of any Asian initial public offering this year so far.
It was up more than eight-fold at Monday’s close, conferring a valuation of HK$2.1 billion ($270 million) on the 10-year-old company. That’s Asia’s best first-day performance in 2016, surpassing the near-700% gain that Ching Lee Holdings Ltd. managed in March, according to data compiled by Bloomberg. At one point, the company jumped as much as 2,000% on Hong Kong’s Growth Enterprise Market.
Chief Executive Officer Kevin Ma founded the company from his bedroom in 2005 to indulge a passion for athletic footwear. He spent an inordinate amount of time online compiling new tidbits on sneakers before starting Hypebeast, slang for someone who buys into the buzz but not the product itself, according to the company. The site has since morphed into a family of Web sites and an online store that generated HK$99 million of revenue in the year ended March 2015.
The Hypebeast, Hypetrak, and Popbee Web sites and apps cover the latest fashion and culture trends for a millennial audience. In 2012, it launched an online store called HBX that carries over 300 brands and 8,000 products.
UPS AND DOWNS
Hypebeast has amassed millions of likes and follows on Facebook, Instagram and Twitter and its platforms attracted more than 46 million page views per month in fiscal year 2015. The digital media division, which had a gross profit margin of 76%, derives most of its revenue from advertising. The US was its largest revenue-generating region, followed by Hong Kong.
Hypebeast raised HK$65 million after pricing its IPO at 13 Hong Kong cents. It soared Monday to as much as HK$2.80 before closing 708% above its IPO price, at HK$1.05. The offering’s joint bookrunners were local brokerages Quam Securities & Futures and Koala Securities Ltd., according to the prospectus.
The company now hopes to expand into other regional markets and plans to focus on improving content and marketing.
“We are very happy at this early reaction, but we will continue to function as we have always done,” Stella Lo, Senior Project Development Executive, said in an e-mail. “We won’t let the ups and downs of the stock market affect our day-to-day operations in any way.” — Bloomberg