Herbs Generation Group made its Hong Kong trading debut on Thursday after the health products maker’s retail portion of the IPO was oversubscribed by more than 6,000 times, marking the second-highest demand in the city's history.

Shares were traded at HK$4.14 ($0.53) at the close, up 10.4 percent from its IPO price of HK$3.75, which was set at the lower end of its marketed range.

The stock hit an intraday high of HK$4.97 in morning trading, up 32.5 percent from its offering price.

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The stellar debut followed its retail portion being oversubscribed by 6,083.63 times over the target of HK$13.83 million, leaving retail investors who applied for one board lot with only a 3 percent chance of getting shares.

The company allocated 50 percent of its shares to retail investors, with the remainder going to international placement which was oversubscribed 1.79 times.

The IPO raised net proceeds of HK$95.3 million.

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The company plans to use 37.8 percent of the proceeds to expand and optimize its sales network, 35.7 percent for strategic marketing and promotional activities, and 12.4 percent for talent recruitment to support its self-operated stores and brand experience centers. The remainder will be allocated for working capital.

Founded in 1999 by actor Roger Kwok Chun-on and his sister Gammy Kwok Chi-yan, the company sells health supplements, cosmetics, and skincare products under brands like Herbs, Zino, and Classic. Its immune system and post-Covid care segment has been the primary revenue driver, contributing over one-third of sales between 2021 and 2023.

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According to consultancy firm Frost & Sullivan, the company ranked fifth in immune system health supplements sales with a 4.9 percent market share and 10th overall in health supplements with a 3.6 percent market share in 2023.

From 2021 to 2023, the company’s net profit surged from HK$23.18 million to HK$39.5 million. However, in the first half of this year, its net profit dropped 59 percent to HK$7.48 million. The company attributed the decline mainly to listing-related expenses of HK$9.86 million.

According to a KPMG report released in early December, Hong Kong recorded 63 IPOs in 2024, raising the capital amount of HK$82.9 billion, up 78 percent from the previous year.

Four of these listings, including the Chinese mainland home-appliance giant Midea, ranked among the top 10 IPO deals in the past three years.

Contact the writer at tianyuanzhang@chinadailyhk.com