Win Hanverky prepares ground for HK$600m IPO
Win Hanverky Holdings, a Hong Kong-based sportswear maker and distributor, will start preliminary marketing for its HK$600 million initial public offering tomorrow.
Win Hanverky, adidas' largest supplier in the mainland, plans to market 300 million shares at 9.5 times to 11.5 times forecast earnings, sources said. By comparison, Yue Yuen Industrial (Holdings), the world's largest maker of sports shoes, is trading at 12.89 times forecast earnings.
Win Hanverky plans to use proceeds from its IPO to fund capacity expansion, as it expects orders from adidas to increase.
'If a company wants to grow with its customers, a listing is a good approach as we can raise sufficient funds,' said Roy Li Kwok-tung, chairman and co-founder of Win Hanverky, confirming the listing plan.
Turnover rose 50 per cent to HK$2.05 billion last year while net profit soared 95.9 per cent to HK$241 million, sources said.
In the first four months of this year, net profit was HK$87.9 million on turnover of HK$763 million, of which 63.1 per cent came from sportswear manufacturing, 17.3 per cent from distribution and 19.6 per cent from active wear such as padded jackets.
Win Hanverky chief financial officer Wilson Cheung Chi said Win Hanverky would set aside more than HK$200 million to expand its sportswear production capacity for this year and next.
A key part of its expansion was to meet demand from adidas, including a plant in Heyuan city in Guangdong that would begin production next year to make football shirts for the German firm, Mr Cheung said.
Win Hanverky estimated its production capacity would increase from about 2.2 million pieces a month to about three million pieces a month by the end of this year, sources said.
'Adidas' consolidation [of its suppliers] is one of the major growth drivers for us. Adidas wants bigger and fewer suppliers,' Mr Li said. 'By consolidating its suppliers, we will definitely get more business from Adidas.'
Win Hanverky also sells to other international brands, including Umbro, Reebok and Diadora. The company is the exclusive licensed distributor of Umbro products in China through 650 retail outlets and concession counters.
Fund managers said mainland manufacturing companies had their investment values but anti-dumping measures and quota imposed by the United States and European Union would be concerns.
To tackle this, Win Hanverky accelerated its expansion plans and established a new facility in Vietnam at the end of last year to reduce risk of further changes in trade policies against China-made products.
Win Hanverky is set to begin taking orders from institutional investors on August 16 and from retail investors on August 25, before the listing on September 6.
DBS Asia Capital is the sole bookrunner of the share sale.
