Soaring shares

China Tobacco International has been the best performing company on the Hong Kong stock exchange since its initial public offering last month, according to Bloomberg.

As of July 3, the company’s share price was up 293 percent from its IPO price of HKD4.88 ($0.63).

While some analysts and fund managers say China Tobacco deserves a premium, others warn the stock’s runup is overdone.

China Tobacco International accounts for a tiny portion of China Tobacco’s overall business, which has a bigger market share than the next five global tobacco companies combined. The unit is primarily responsible for procuring overseas tobacco leaf from countries like Brazil and Canada for the cigarette giant.

Investors are piling into the stock even as pressure increases on the government to curb smoking. China is the largest tobacco-consuming and -manufacturing country in the world, and critics contend the government isn’t doing enough to prevent the spread of smoking.