Listing candidate Guangdong Brewery Holdings has dismissed claims that sales and production of beer in Guangdong had slowed, saying it achieved a 30 per cent jump in sales in the first quarter.
The company, to be spun off from red chip Guangdong Investment - the listed arm of the Guangdong provincial government - is to raise more than $630 million through the issue of 350 million shares.
Chairman Gordon Au Wai-ming said the company would make the buying of four breweries and a malting business from its parent a priority, but he did not have a timetable for the purchases.
Financial controller Donald Chau Kam-wing said profit margins should be able to stay at the present high level.
Company figures suggested the operating profit margin slipped from about 22.9 per cent in 1995 to 20.2 per cent last year and 18 per cent in the first quarter.
Mr Chau said: 'Beer business is a volume game. We will be able to maintain profit margins once we have the volume.' The brewery's production capacity will reach 400,000 tonnes early next year, up from 200,000 tonnes now and 100,000 tonnes before last October.
The company's public offer starts next Tuesday, and trading is scheduled to begin on August 8.