UPDATE 1-Shampoo maker BaWang soars in HK debut

HONG KONG, July 3 - Chinese herbal shampoo maker BaWang International (Group) Holding Ltd posted a strong debut on Friday as its shares soared 32.4 percent from its initial public offering price, bucking a selloff in the broader market.

The stock rose as high as HK$3.15 per share after opening at HK$2.95, compared with its initial public offering price of HK$2.38 with 670 million shares changing hand.

BaWang, which hired movie star Jackie Chan and pop singer Faye Wong to promote its products, sold 700 million shares at a price representing 18 times its estimated earnings for 2009.

Market analysts said BaWang's debut price was in line with expectations given the weakness in the broad market, which fell for a fourth day this week. Friday's sell-off was triggered by disappointing U.S. jobs data.

"That's the way the Hong Kong market functions; when something is hot everyone wants a piece of it," said Jackson Wong, investment manager with Tanrich Securities.

The broader Hang Senmg Index was down 0.04 percent as at 0317 GMT.

BaWang International, among the most popular IPOs in the territory so far this year with its retail public offering portion 446 times subscribed, priced its HK$1.67 billion ($213.6 million) IPO at the top end of the indicative range.

Demand for IPOs heated up recently, especially for consumer goods-related companies on the mainland betting they will benefit as China economy is set to be among the first to recover.

The retail offering of the recent IPO of Chinese sportswear retailer 361 Degrees was over 40 times subscribed.

Its retail portion was increaseed to account for 50 percent of the shares on offer from an initial 10 percent while international placing portion was cut back to 50 percent from an initial 90 percent to meet the strong demand from retail investors.

The company will use the proceeds to expand production and the company's distribution network.

HSBC and Morgan Stanley managed the deal.

Another new listing, China Qinfa Group rose as high as HK$2.80 on its debut, up 11.1 percent from its IPO price of HK$2.52 each. The Chinese coal trader priced its HK$630 million ($81 million) Hong Kong IPO at top end of range, raising capital for investment in new production facilities.

It sold 250 million shares at a price representing a 2008 price-to-earnings multiple of 9.5 times. China Everbright Capital handled the deal. (US$1=HK$7.75)