Mainland packaging firm Jin Bao Bao seeks HK$65m in share offer

Mainland packaging and component manufacturer Jin Bao Bao Holdings seeks HK$65 million in a public offering today and a wave of more sizeable listing attempts may materialise in the coming two months if market sentiment improves.

Jin Bao Bao supplies packaging and structural parts to mainland television and refrigerator brands including Konka and Haier. It will offer 50 million shares ranging between HK$1 and HK$1.30 a share. Only 10 per cent of the shares will be opened for public subscription.

Chairman and chief executive Chao Pang-ieng said 87.5 per cent of the funds raised would be used to build a factory in Wuhu, Anhui. The factory, the company's fourth, would boost total annual capacity by about one-third to 20,100 tonnes.

However, executive director Zuo Jilin said the company had not yet found a strategic partner in the area. Typically, a packaging provider will locate its factory near a plant of a client because the appliances will have to be delivered to their facility for packaging.

Jin Bao Bao made 20.29 million yuan (HK$24.82 million) in net profit during the first half of this year - a rise of 64.8 per cent on the same period last year. But HK$8 million in listing expenses is likely to affect its profits.

It also said in its listing document that if it lost the tenancy of a factory in Sichuan, it might stand to lose 5.4 million yuan of annual income, on top of 2 million yuan in expenses to relocate the factory.