China Starch and Qunxing Paper target HK$1.95b
Mainland listing hopefuls Qunxing Paper Holdings and China Starch Holdings planned to raise a combined HK$1.95 billion on the main board to fund expansion, sources close to the offerings said.
Qunxing Paper, the largest decorative base paper manufacturer in the mainland, is selling 300 million shares at HK$4.10 to HK$5.35 each in an up to HK$1.6 billion initial public offering, according to sale document sent to fund managers.
The offering price translates to 19 times to 25 times this year's earnings.
The firm has brought in three cornerstone investors - Cheung Kong (Holdings), Cheng Yu-tung's Chow Tai Fook Nominee and South China Morning Post controlling shareholder Kerry Holdings - who are taking up a 9.6 per cent stake in the offering by paying up to HK$171 million for 32 million shares each.
Qunxing Paper expects its net income could reach 200 million yuan this year, having earned 67 million yuan in the first four months of this year. It reported 93 million yuan in net profit for last year.
Trading is set to begin on October 2. ICBC subsidiary ICEA is the sole bookrunner.
Meanwhile, cornstarch producer China Starch, which will launch an up to HK$347 million initial public offering tomorrow, plans to expand its business to central and western areas of the mainland via mergers and acquisitions, from its headquarter in Shandong province, according to founder and chairman Tian Qixiang.
The mainland's third-largest cornstarch producer was in talks to buy smaller rivals and plans to expand the capacity of the acquisitions to about 400,000 tonnes by the end of the year or early next year, which would account for almost half of China Starch's total production capacity then, Mr Tian said.
The move was aimed at meeting growing demand from the regions as more manufacturing industries were expected to migrate from eastern China, Mr Tian said. He added that provinces including Shanxi and Shaanxi were also major corn producers that could provide a stable raw material supply.
At the end of last year, China Starch had an annual production capacity of 450,000 tonnes, and a sales volume of 350,000 tonnes. Cornstarch products are widely used as flavourings, and in beer, textiles and paper products.
The firm kicked off the international offering by selling 150 million new shares at an offer price of between HK$1.85 and HK$2.31 each, market sources said.
Earnings growth
Qunxing Paper expects net income to reach 200 million yuan this year
Qunxing Paper is selling 300 million shares in its initial public offering to raise up to, in HK$1.6b
