Shares in Cinda Asset Management, which handles bad debts run up by Chinese banks, have surged on their debut.
The firm’s share rose as much as 23% to HK$4.79 in early trading in Hong Kong.
The state-owned firm is one of the four asset management companies created in the 1990s to take on bad loans of government controlled Chinese banks.
It has raised nearly $2.5bn (£1.1bn) via a share sale to fund new purchases of distressed assets amid a fresh rise in bad loans in China.
Bad debts at leading Chinese banks have risen after a big surge in lending in the years following the global financial crisis that unfolded in 2007-08.
Banks in the world’s second-largest economy lent out record sums of money in an attempt to sustain China’s high growth rate amid a slowdown in the global economy.
However, there are now concerns that banks may not be able to recover some of those loans.
Non-performing loans at Chinese banks rose to 563.6bn yuan ($93bn; £57bn) in the July-to-September quarter.
Analysts said that investors were betting on the firm being able to buy some of those distressed assets at a discounted price and sell them later for a profit.
