TAIPEI: Tingyi (Cayman Islands) Holding Corp, the world's largest producer of instant noodles, surged by its daily limit on its Taipei trading debut on optimism that sales prospects on the mainland may improve.

Shares of the maker of "Master Kong" brand of noodles jumped 7 percent to NT$48.15 at the close of Taipei trading. A total of 380 million Taiwan depositary receipts (TDRs) were sold by its biggest shareholder at NT$45 each, the top of its price range.

The company's Hong Kong-traded stock fell 5.1 percent to HK$19.32, set for the biggest drop since December 1, 2008.

Chairman Wei Ing-chou said in an interview this week he may buy mainland food companies and expand his real-estate holdings before retiring in four years. Tingyi may target companies that produce beverages and baked goods on the mainland, and Wei may buy and manage office properties in Taipei and Shanghai.

The mainland consumption story is still a fresh theme for Taiwanese investors and they are excited about it, said Patrick Tang, an analyst for Mega Securities Hong Kong Co.

"In Hong Kong, the fervor about TDRS has died down. The chairman's plan to retire would also cause some concern to investors as this may impact the company's growth," the analyst said.

Tang has a "sell" recommendation on the Hong Kong shares.

The stock sale is the largest on the island by companies controlled by Taiwanese investors that operate on the mainland. The Taiwan share sales help companies including Tingyi and Want Want China Holdings Ltd expand an investor base drawn to the warming ties between the mainland and Taiwan, which led the island to ease restrictions for such listings.

Retail sales on the mainland may rise 15.6 percent this year, the Ministry of Commerce said in Beijing earlier this month, and the State Council said the central government needs to keep expanding consumption to drive growth.

Tingyi's shares surged because investors want to own mainland consumer stocks, which are hot now, Monika Yang, who helps oversee $2 billion at Hamon Asset Management Ltd in Hong Kong, said by phone yesterday.

Tingyi runs a 17-year-old business that includes 24 noodle factories and bottling plants in almost every mainland province.

There's no brighter place than the mainland, Wei said in a December 14 interview at his headquarters in Tianjin, northern China. "We won't give this place up," he insisted.

Wei started transforming Tingyi from an oil and grease company founded by his parents in 1958 into the biggest maker of packaged foods on the mainland in the early 1990s, when he foresaw growing demand for fast meals as more mainlanders moved from the countryside to the cities for factory work. He opened his first noodle factory in Tianjin in 1992.

Sales of "Master Kong" have surged 500-fold since production began, helping make Wei Taiwan's fifth-richest man with an estimated wealth of $3.2 billion, Forbes Magazine reported in July.

Tingyi sold 15 billion yuan ($2.2 billion) of instant noodles last year, compared with 30 million yuan in 1992.

China Daily/Bloomberg News

(HK Edition 12/17/2009 page2)