Shares of Bossini International Holdings, the beleaguered Hong Kong clothing giant, doubled on Thursday as investors piled in on hopes Chinese gymnastics star Li Ning's offer to buy a majority stake might revive its dwindling fortunes.
Hong Kong-listed shares of Bossini skyrocketed by 99 per cent to close at HK$0.5, against a 0.5 per cent decline in the benchmark Hang Seng Index.
The stock has gained a stunning 233 per cent over the past five trading days, after a joint venture controlled by Viva China, a sports talent agency founded by Li, said it would buy a 66.6 per cent stake in the firm founded by the late textile tycoon Law Ting-pong in 1987.
Textile magnate Law Ting-pong, founder of Bossini, beside his luxury car. Photo: Chu Ming-hoi alt=Textile magnate Law Ting-pong, founder of Bossini, beside his luxury car. Photo: Chu Ming-hoi
Investors turned optimistic about the company's long-term prospects under the new controlling shareholder, who has rejuvenated his eponymous sportswear brand in the past two years and propelled mouth-watering gains in Li Ning's stock price in Hong Kong.
"To Bossini's investors, the stock has suddenly transformed from having little prospect to being full of growth potential especially in the mainland Chinese market," said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
Investors were also unfazed by the fact that Viva China offered to buy Bossini's shares at a massive discount " the offer price was 71 per cent lower than the share price when the news was announced.
Bossini, which operates 39 stores in Hong Kong and Macau and 180 in mainland China, has seen its performance deteriorate in recent years as the iconic brand failed to adapt in an increasingly competitive consumer market.
The massive street protests in Hong Kong last year also weighed on its business, which lost HK$139 million in 2019.
It used to be one of Hong Kong's three most iconic home-grown clothing retailers, along with Giordano and Baleno. Its market capitalisation has plunged by 81 per cent since a peak in 2004 to HK$812 million.
Meanwhile, Li Ning, currently China's second-largest sportswear maker by market share, has successfully transformed its brand over the past year to attract a younger and more affluent consumer generation in China. Its efforts to appeal to Chinese youth's growing appetite for high-end domestic products bore fruit, resulting in a 206 per cent rise in its share price since the beginning of 2019.
Shares of Li Ning fell 2.7 per cent to HK$25.6 on Thursday.
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