Sep 8, 2021

They are vintages but just not old enough. Enter Zhang Xiaoquan, a nearly 400 year-old maker of household hardware products that debuted on the Shenzhen ChiNext Market earlier this week with an opening price more than four times its IPO price. The huge rally showed how passionately investors cheered for the famous scissor maker which dated back its history to the Chongzhen Emperor in Ming Dynasty. Zhang Xiaoquan, son of craftsman Zhang Jiasi who discovered a way to make scissors that were beautiful and durable, inherited the family business and later started the namesake company. The company made Kweichow Moutai, a liquor that started in 1640 in the Qing Dynasty, and HSBC, which also started its business back in 1865, look young. Imperial dynasties have come and gone, it seems like the humble but beautiful hand-made utensils are more durable. The multi-century-old firm secured 6,220 times over subscription in its initial public offering that raised 269 million yuan for building of an intelligent manufacturing centre. Last year Zhang Xiaoquan, sold 29.32 million scissors and reported a turnover of 572 million yuan, up 18 per cent. The company made a profit of 77 million yuan during the period, up seven per cent. Priced at 6.9 yuan a share, Zhang Xiaoquan shot above 38 yuan intraday before settling its first day of trading at 34.09 yuan, a 394 percent gain. (The stock has given up some of the gains since then and was last quoted at around 30.40 yuan.) A string of century-year-old Chinese companies have jumped on the bandwagon of seeking a public debut for rejuvenation as they aspire to seek public money for growth. Shandong Dezhou Braised Chicken Co Ltd, a chicken cuisine firm more than 300 years old, and Zhejiang Wufangzhai Industry Co Ltd, which celebrates its centennial this year with its signature rice dumplings or zongzi, have reportedly filed for listing. Some century-old franchises did really well after listing. Among others, Kweichow Moutai and traditional medicine producer Zhangzhou Pien Tze Huang Pharmaceutical showed strong share price performance backed by robust earnings growth. But others were less fortunate. For example, China Quanjude, an iconic Beijing roast duck restaurant chain, suffered from a net loss last year under the shadow of the pandemic. Still, welcome the old dogs to the financial market!