Greatview investors reap 14.4pc gain on first day of trading
Investors in Greatview Aseptic Packaging saw the value of their shares jump 14.4 per cent on their trading debut on the Hong Kong stock market yesterday.
The shares, offered at HK$4.30 in the company's initial public offering, closed at HK$4.92 - brushing aside concerns over a prospective patent infringement case against the mainland manufacturer from Swedish packaging giant Tetra Pak.
About 173 million shares worth HK$829.85 million changed hands, with the share price reaching a high of HK$5.01 and a low of HK$4.60.
According to business research and consulting firm Frost & Sullivan, Greatview had 9.6 per cent of the mainland's aseptic packaging market by sales volume last year.
It was also the second-largest roll-fed supplier of aseptic packaging globally.
The company supplies aseptic packages to mainland dairy producers such as Mengniu as well as international dairy and beverage producers. Aseptic packages are sterilised to be germ-free to ensure the safety of the drinks contained.
'After the IPO, capital is not an issue. Before the IPO, we couldn't get enough capacity to satisfy the market. Now I hope we can,' said Jeff Bi Hua, the chief executive who co-founded Greatview with chairman Hong Gang.
The company raised net proceeds of HK$902.9 million from the sale of 233.6 million new shares.
Greatview intends to spend HK$225.7 million on expanding capacity at its factory in Gaotang county, Shandong province, and HK$135.4 million on boosting production at a plant in Helingeer county, Inner Mongolia.
It also plans to spend HK$180.6 million on a factory in Germany, which Bi said would be Greatview's first factory outside China and would be built within two years. It will also use HK$270.9 million to repay bank debt.
According to its prospectus, Greatview is facing a lawsuit in Dusseldorf, Germany, filed on July 23 by Tetra Pak, a Swedish firm that controls 80 per cent of the world's aseptic packaging market.
The lawsuit alleges Greatview infringed a European patent owned by Tetra Pak.
In response to the lawsuit, Bi said: 'We have filed our defence with the court in Dusseldorf. We think our chance of winning is high.'