Vitasoy International Holdings Ltd. shares suffered their worst-ever plunge on Monday, as Chinese consumers called for a boycott over an employee memo offering condolences to the family of a colleague who stabbed a Hong Kong police officer and killed himself.
The Hong Kong-listed beverage maker’s shares plunged as much as 15% to 25.00 Hong Kong dollars, marking the stock’s biggest single-day loss since its listing in 1994. The broader market in Hong Kong was down slightly, with the benchmark Hang Seng Index declining 0.7%.
The shares’ slump came after the online circulation of a document sending condolences to the family of a 50-year-old Vitasoy worker who had stabbed a Hong Kong policeman and then killed himself last week on the anniversary of the former British colony’s return to Chinese rule.
The case is now under active investigation by the Hong Kong police’s national security department.
Vitasoy said in a statement on Saturday that the memo was written and sent around internally by a staff member without the company’s authorization. It described the document’s wording as “extremely inappropriate” and said it reserved the right to take legal action.
The company also pledged to cooperate with and support Hong Kong authorities.
Criticism of Vitasoy–including calls for a boycott–by Chinese social-media users surged late last week, while two celebrities pulled their endorsement and business deals with the brand.
Analysts said the incident may dim a much-anticipated sales boost for Vitasoy from a seasonal demand boom in the summer. “The timing of this is not very good obviously, because we are just entering the peak season for beverages,” said DBS analyst Alice Hui. Consumer sentiment tends to play a major role in beverage sales, a highly competitive market with a large number of rival options that make it easy for buyers to switch products.
China is Vitasoy’s largest and fastest-growing market, contributing to around 65% of revenue. The company has been investing heavily in the country in a bid to drive its post-pandemic recovery.
“The situation is still pretty volatile,” Ms. Hui said, “It really depends on how sentiment will play out in the next couple of weeks.”