Huileng Tan
3 min read
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Thai coconut-maker IFBH's stock surged 67% on its Hong Kong debut.
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IFBH's IF coconut water has one-third of the market share in China.
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Coconut water is a fast-growing market in China as consumers are increasingly health-conscious.
Stock of a China-focused coconut-water beverage surged on its first day of trade, showing that niche consumer brands can still capture attention and money in a sluggish Chinese economy.
On Monday, shares of Thai coconut water maker IFBH leaped as much as 67% on their debut on the Hong Kong Stock Exchange.
IFBH's initial public offering was priced at 27.80 Hong Kong dollars a share, or $3.54. The shares surged as much as HK$46.50 minutes shortly the opening bell and closed at HK$39.50.
Investor enthusiasm for IFBH was clear even before trading began. The offering was 2,682 times oversubscribed. Cornerstone investors included UBS Asset Management and ICBC Wealth Management.
The strong debut comes despite a broader slump in Chinese consumer spending that has hit luxury sales in the country. However, some sectors, like sports and lifestyle, are still raking in the big bucks.
IFBH, which makes the IF range of coconut water, has been the top coconut water brand in China for five straight years, according to research firm Baiguan in a post earlier this month. In 2023, IF held a one-third share of the market.
Once seen as a niche hydration product for athletes, coconut water is now a fast-growing category. It's being served in mainstream dining venues like restaurants and cafés, Jason Yu, the managing director for Greater China at the UK-based consumer research group Kantar Worldpanel, told Business Insider.
"Coconut water is seen to have multiple benefits that are good for consumers and for sports without being sugary," Yu said.
"Like yogurt drinks, it's seen as a good alternative to soda and other sweetened beverages when dining. Coconut water also pairs very well with hot and spicy food," he added.
Baiguan analyst Nina Chen credited IFBH's success in part to the popularity of Luckin Coffee's coconut latte and brand collaborations, including tie-ups with Labubu-maker Pop Mart and celebrity endorsements.
"IF exploited a unique market gap: high Chinese demand for a product (coconut water) the country couldn't easily produce," wrote Chen.
Driven by rising demand in China, IFBH revenue hit $157.6 million in 2024, up 80% from the year before, according to its IPO prospectus. The company plans to use the proceeds to invest in product development, marketing, and expansion into new markets, including the Americas and Australia.
