[THE INVESTOR] Chinese toy-maker Heng Sheng Holding Group ’s stock slumped on its first day of trading on South Korea’s secondary KOSDAQ market as a public company.

The stock closed at 2,690 won (US$2.40) on Aug. 18, down nearly 17 percent from its opening price, which was already below the initial public offering price of 3,600 won. 

Sluggish demand from investors is a disappointing result for Heng Sheng’s Chairman Hui Man-Kit, who pledged to take measures to ease Korean investors’ distrust towards Chinese companies.

The listing was delayed for two weeks as investors cast doubts on the reliability of Chinese firms after another KOSDAQ-listed firm, China Ocean Resources, came under fire for filing a false disclosure statement in April.

“We will establish a liaison office here to quickly deliver company disclosure information to Korean investors,” Hui Man-Kit said in a press conference, held in Seoul on Aug. 17 before the IPO.

To dispel the distrust, the chairman said that Heng Sheng will pay dividends to investors once or twice a year.

Heng Sheng is the third China-based company to float its shares on the Seoul bourse this year, following China Crystal New Material Holdings and Rothwell International.

Established in 1992, it is the largest toy manufacturer in Fujian province, supplying toys to international enterprises such as Disney, Mattel and Fisher-Price.

By Park Han-na (hnpark@heraldcorp.com">hnpark@heraldcorp.com)