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Hot stock: China Star Food surges on second day of trading
CHINA Star Food, which started its Catalist trading on Wednesday following a reverse takeover and a compliance placement to lift its public float, continued its surge on active trade for the second straight trading day.
At 12.34pm on Thursday, the stock shot up by seven Singapore cents or 24 per cent to 36 cents. The counter closed 10 cents or 34 per cent higher at 39 cents, with some 14.8 million shares changing hands.
Dealers noted that the valuation of the compliance placement of 25.25 million shares at 23 cents apiece was on the low side, vis-a-vis the share price of 60.4 cents after a share consolidation that took place prior to the compliance placement.
The placement price was made palatable for investors to take up the private placement, one broker said. "And since the public listing was undertaken entirely through the placement, the placement price forms the base for the recent trading."
The Fujian-based food products company specialising in the production and sale of sweet-potato snacks had completed a S$168 million reverse takeover of cash company Brooke Asia in September last year.
Its snacks are sold mainly to distributors and wholesalers, who distribute via e-commerce portals and supermarkets, petrol kiosks, convenience stores and specialty stores throughout China.