The amazing Most Kwai Chung, the company behind the satirical weekly magazine 100Most and online media platform TVMost, has produced an unlikely winner – Media Chinese International Ltd. (00685.HK) chairman Tiong Hiew King.
The stock, with a retail subscription of 6,289 times during its initial public offering, began trading on Wednesday with a gain of six times, giving its investors a handsome return in excess of HK$14,000 if they sold at the market open.
Media Chinese International, through its subsidiary One Media Group, invested a mere HK$1.7 million in exchange for a 10 percent stake in Most Kwai Chung back in 2012. The stake is now worth more than 100 times at its current market price.
Media Chinese, which publishes Ming Pao and other Malaysian newspapers, has not sold a share in Most Kwai Chung but was still able to cash in on the fever of arguably the most creative and profitable new media venture in Hong Kong.
Major shareholder Tiong Hiew King sold 3.59 million shares of Media Chinese at an average price of HK$2.66 last Wednesday. On the same day, he bought the same amount of shares in the Malaysian market for an average of only 0.446 ringgit (90 HK cents).
In other words, Tiong kept his stake at 50.62 percent but the arbitrage netted him a cool HK$6.34 million.
Media Chinese surged almost five times in a single day on March 19th when news that the retail tranche of Most Kwai Chung was way oversubscribed. Investors quickly pushed up the shares of Media Chinese, which had a market capitalization of only HK$1.65 billion before the surge with very little turnover.
Its turnover over a period of only three days (March 19 to 21) was much more than its accumulated turnover over the last three years.
Indeed, the 84-year-old tycoon took advantage of the rare trading opportunities from his smart investment in Most Kwai Chung.
It should be noted that Media Chinese is the only dual-listed stock in Hong Kong that issues the same share certificate for trading in Hong Kong and Malaysia, thereby making arbitrage possible.
Even HSBC (00005.HK), which is also listed in New York and London, cannot trade the same paper in the three major stock exchanges.
– Contact us at [email protected]