UPDATE 1-China funeral company soars in HK debut, leads spate of 1st day gains

12/19/2013

* Top China funeral provider gains 66 pct in first trading day

* Four other companies post sharp gains in HK debuts

By Elzio Barreto

HONG KONG, Dec 19 (Reuters) - Shares of Fu Shou Yuan International Group Ltd, China's largest provider of funeral services, soared as much as 66 percent in their Hong Kong trading debut on Thursday, leading a pack of first-day trading gains in the city.

Shares in Fu Shou Yuan, in which private equity firm Carlyle Group LP and hedge fund firm Farallon Investors took a minority stake, jumped to HK$5.30 compared with an IPO price of HK$3.33, according to Hong Kong stock exchange data.

Carlyle, whose co-founder William Conway visited Fu Shou Yuan's main cemetery in Shanghai with a group of eight executives in December 2010, agreed to buy $25 million worth of shares, giving the company a $16.5 million paper profit on its week-old investment.

San Francisco-based Farallon bought another $10 million worth of Fu Shou Yuan shares, according to the IPO prospectus.

Fu Shou Yuan's IPO was swamped by orders from small investors with the retail portion generating demand of more than 681 times the shares on offer, a company filing showed on Wednesday. The institutional tranche of the IPO was "very significantly over-subscribed", the filing added.

Other companies also traded sharply higher in their debuts. Japanese online payment provider econtext Asia Ltd., rose as much as 34 percent and China Conch Venture rose 22 percent.

Kerry Logistics and Consun Pharmaceutical were up 6.9 percent and 5.5 percent from their IPO prices.

The strong debuts bode well for new listings in Hong Kong in 2014, when analysts and investors expect a bumper year with large offerings to put the city back at center stage for IPOs.

Some of the top deals expected include a $5.7 billion IPO for the electricity business of Li Ka-shing's Power Assets Holdings Ltd, a $6 billion deal from Chinese meat processor Shuanghui International Holdings and potential multi-billion dollar listings from health and beauty products retailer A.S. Watson & Co Ltd and e-commerce giant Alibaba Group Holding Ltd.



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