Hung Fook Tong taps market for HK$148m
Hung Fook Tong eyes growth on the mainland as it launches share sale to raise HK$148 million
Three companies, including herbal drinks maker Hung Fook Tong Group Holdings, yesterday launched their initial public offerings.
Hung Fook Tong aims to raise net proceeds of about HK$148 million, assuming an offer price of HK$1.15 per share, the mid-point of an indicative price range.
The maker of bottled herbal tea with 34.4 per cent share of the city's market, said the mainland would be the focus of its future growth while it would also work to strengthen its presence locally.
"We have added 13 retail shops on Hong Kong Island this year," general manager Ricky Szeto Wing-fu said. "We do not have as many stores on the island as we have in other parts of Hong Kong."
Hung Fook Tong had 97 self-operated retail shops as of June 13, mainly at MTR stations and shopping centres. It aims to open 25 retails shops this year and 30 next year.
On the mainland, it has 25 retail shops in Guangdong and Shanghai. The company intends to open at least 10 self-operated retail shops each in the two locations in the next 12 months, according to Szeto.
Lyncean Securities managing director Francis Lun Sheung-nim said he was not sure about the company's prospects on the mainland.
"It has been there since 2007 but doesn't seem to have cracked the market. Its retail shops on the mainland reported a net loss of HK$3.15 million last year, after losing HK$6.54 million in 2012," Lun said.
Separately, mainland residential developer Guorui Properties is looking to raise a net HK$1.6 billion to fund its expansion.
As of March, the firm had land reserves of 6.8 million sqmetres in nine cities, including Beijing, Shenyang and Zhengzhou.
It said it planned to focus on Beijing, the Pearl River Delta and Yangtze River Delta for the next five to 10 years.
Chairman Zhang Zhangsun said he believed the property industry would continue to grow in the next 10 to 15 years because of rapid urbanisation.
"The fundamentals of the mainland economy are healthy, so too are that of the property industry," Zhang said.
The company said 60 per cent of the proceeds, or HK$962 million, would be pumped into development projects, while 30 per cent would be used to replenish land reserves.
Kangda International Environmental, a mainland company which invests in and operates wastewater treatment facilities, is targeting a net HK$1.1 billion from its initial share sale. It said it would spend 65 per cent of the proceeds on growing its project portfolio and acquiring facilities.
The stocks of the three companies are expected to begin trading on July 4.