First day of trading drops below the listing price: "The first copper-themed cultural and creative stock," Master Copper's closing stock price fell by 49.17%

On March 31, Hangzhou Tong Master Cultural Creation (Group) Co., Ltd. (hereinafter referred to as “Tong Master”) officially listed on the Main Board of the Hong Kong Stock Exchange. By the close on March 31, Tong Master’s share price was HK$30.5 per share, down as much as 49.17%.

In the view of economist Pan Helin, the industry segment Tong Master operates in has a clear cyclical nature, which runs counter to the preferences of long-term investors in Hong Kong stocks, leading to the phenomenon of trading below the offer price at the open.

The distribution results announced by Tong Master show that the company’s global offering consisted of 7.4068 million H shares, with the Hong Kong public offering accounting for 15% and the international offering accounting for 85%. The final offer price was HK$60 per share, and the net proceeds from the global offering were approximately HK$390 million. Of these, the Hong Kong public offering was subscribed by 59.55 times, while the international offering was subscribed by 1.56 times.

According to a report by Jiemian News, in the over-the-counter (OTC) trading session on March 30, Tong Master’s share price had already fallen by more than 6%, and the closing decline widened further to about 30%.

Yuan Shuai, deputy secretary-general of the Zhongguancun IoT Industry Alliance, said, “On the one hand, the unique concept of ‘the first copper-based cultural and creative brand’ has attracted the attention of some investors. The niche nature of the cultural and creative segment, together with Tong Master’s leading position in a sub-segment, leads some investors to see the potential of a differentiated market. At the same time, it is also related to market promotion during the offering stage and investors’ expectations for cultural-and-creative consumption upgrading. Some retail investors, influenced by the惯性思维 of the ‘new stock dividend,’ follow the crowd to participate in the subscription. On the other hand, however, there are concerns in the market about Tong Master’s profitability and growth certainty, and the continued decline in the share price during OTC trading also serves as a preview of the market’s attitude. Investors remain cautious about its long-term growth potential, and the combined effect of professional funds standing by and retail investors selling off ultimately puts downward pressure on the share price and leads to a break below the offer price.”

According to Tong Master’s post-hearing materials, from 2022 to 2024, Tong Master’s revenue was RMB 503 million, RMB 506 million, and RMB 571 million, respectively; net profit was RMB 56.938 million, RMB 44.131 million, and RMB 78.982 million, respectively. In the first three quarters of 2025, the company experienced “increased revenue but not increased profit.” Revenue grew year over year by 11.26% to RMB 448 million, but profit for the period fell year over year by 21.99% to RMB 41.553 million.

Based on data disclosed in the prospectus, as the company’s main product, the gross margin of copper-based cultural and creative products is not leading. Taking 2024 as an example, the gross margin of copper-based cultural and creative products was 35.2%. This was not only clearly lower than plastic trend toys (43.6%) and wood-based cultural and creative products (46.4%), but also below the company’s overall gross margin for the same year (35.4%).

In an interview with Beijing Business Today earlier, Yuan Shuai also said that Tong Master’s main business is highly tied to copper-based cultural and creative products, meaning it will be very sensitive to fluctuations in copper prices. If copper prices rise, it will directly increase the procurement cost of raw materials and indirectly affect overall revenue.

“The core fundamental factor suppressing the share price is that the ceiling of the industry segment Tong Master is in is too low.” Jiang Han, a senior researcher at PanGu Think Tank, further said, “The copper-based cultural and creative market is a typical ‘small but beautiful’ market. In 2024, its overall scale was only about RMB 1.6 billion. Even if it is the leading player with a 35% market share, the characteristic of stock-in-trade game dynamics is evident, and there is a lack of sufficient room for imagination to support sustained growth in high market capitalization.

The prospectus shows that from 2019 to 2029, the market size of China’s metal-material cultural and creative handicraft products is expected to grow from RMB 23.1 billion to RMB 29.3 billion. Over the same period, the plastic resin category is expected to rise from RMB 38.0 billion to RMB 155.5 billion, with much greater growth potential than the metal category.

“Right now, copper-based art pieces have not formed a trend. The barriers in this field are actually not high, and it is also relatively difficult to popularize copper-based art pieces.” Pan Helin said. In the future, a breakthrough for Tong Master may lie in innovating products that appeal to a broader customer base, transforming from “niche copper art” to “mainstream cultural and creative products,” becoming part of popular culture.

In addition, Yuan Shuai said that Tong Master can also take a path toward higher-end and customized offerings by提升ing the cultural value-added and craftsmanship level of its products, tapping into the depth value of sub-markets, and building products that combine artistic appeal and practical utility—thereby consolidating existing customer bases while attracting more consumers who pursue quality and cultural depth.

Regarding the reasons for the break below the offer price on the first day of listing, and the subsequent plan to launch new products, Beijing Business Today correspondent sent a letter to Tong Master. The company responded that it is temporarily unable to comment on the above issues.

Beijing Business Today — Cheng Liang