Chow Tai Fook set for IPO of US$3b in HK
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China.org.cn, December 5, 2011
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Jeweler set for IPO of US$3b in Hong Kong |
Chow Tai Fook Jewellery Group Ltd may raise as much as HK$22 billion ($2.8 billion) in what could be Hong Kong's biggest IPO this year as luxury-goods companies tap growing affluence in China, Bloomberg News reported.
The retailer, controlled by real-estate billionaire Cheng Yu-tung, is offering 1.05 billion new shares at HK$15 to HK$21 each, according to a prospectus released yesterday. Chow Tai Fook plans to start trading on Dec 15.
Half of the funds raised by the company will be used on raw materials and inventory, with 36.5 percent for repayment of loans and 5 percent on buying properties and renovating stores, the company said. The remainder will be used to buy production and R&D equipment, to build an office building in Shenzhen, and on working capital.
The offering will test investors' appetite after shares of Prada SpA, which raised US$2.5 billion in Hong Kong's biggest IPO so far this year, declined since debuting in June. Sales of luxury items on the mainland will more than double from last year to about 180 billion yuan (US$28 billion) in 2015, McKinsey & Co estimates.
Chow Tai Fook, with over 1,400 mainland outlets, forecasts net income of more than HK$6.3 billion in the year ending March 31, according to a statement to Hong Kong's stock exchange earlier.
Chow Tai Fook has 12.6 percent of China's jewelry market, with a 20 percent share in Hong Kong and Macao, the company said, citing a Frost and Sullivan report.
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