Jump in Hottest Hong Kong IPO Makes Founder China’s Second Richest

It was the hottest IPO in town. NowNongfu Spring Co.’s stock surge is turning its founder into China’s second-richest person.

Shares of the bottled water maker jumped as much as 85% and traded up 63% as of 10:36 a.m. in Hong Kong, on pace to be the city’s third-best initial public offering on record among firms raising more than $1 billion.

That’s pushing the net worth of Zhong Shanshan, who owns 84% of the firm he founded in 1996, to almost $54 billion, according to theBloomberg Billionaires Index. He’s now the wealthiest person in China, just after Alibaba Group Holding Ltd.’s Jack Ma and above Tencent Holdings Ltd.’s Pony Ma.

The IPO was a smash hit in Hong Kong, so much so that the retail portion was oversubscribed by more than1,100 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.

The IPO market in China and Hong Kong has remained vibrant this year despite the coronavirus outbreak. 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 least24 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 rankings. His fortune was boosted in April whenBeijing 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 more than 2,100% since then.

That’s quite aturnaround 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 least68 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 hisAnt Group is poised to boost his fortune further — his stake is worth$25 billion at the $225 billion valuation the payments giant is targeting.

Ma’s wealth stood at $57.8 billion as of Monday’s close, while Tencent’s Pony Ma was worth $52.1 billion.

— With assistance by Pei Yi Mak, and Julia Fioretti

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