Merry Garden, a Fujian-based producer of timber products, kicks off its initial public offering today, aiming to raise as much as HK$207 million in a test of investor sentiment in a sluggish economic environment.
The company, which produces timber cabins, landscape garden products and other leisure goods, such as swings and pet houses, plans to issue 180 million shares in its global offering, 90 per cent of which will be offered internationally and the rest in Hong Kong.
With a price range set between HK$1-HK$1.15 per share, the public offering's size could reach between HK$180 million and HK$207 million, assuming the over-allotment option is not exercised.
The public offering would end on Friday, and the company was talking with two or three big investors, said Donny Wong Dongqing, executive director of Guotai Junan International, the sole book runner and global co-ordinator.
Wong said Merry Garden was expected to make a profit of 93 million yuan (HK$113.9 million) this year. The company earned a net profit of 70.7 million yuan last year.
'We think that the landscaping and timber villa business from resorts and tourist attractions will be a major growth driver going forward,' said Wu Zheyan, chairman and chief executive officer at Merry Garden.
Even though the company launched its own brand, Merry Garden, in 2010, most of its business comes from production orders from other companies.