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SCMP Reporter

SECOND-hand car trader Shing Kee Holdings plans to raise funds for expansion by listing on the stock market.

  Managing director Thomas Chan Tin-chi said the company was seeking advice from several consultants on its plans.

  'We are working towards the direction of listing. I believe we will be listed very soon,' Mr Chan said yesterday.

  He said the money raised would be re-invested into the second-hand franchise business, which would ultimately target the Chinese market.

  The company also planned to spin off the franchise arm once its business was established and performing well.

  Mr Chan said he was confident the company's share issue would not be under-subscribed.

  He said the gross profit of the second-hand car market ranged from 23 to 100 per cent, depending on the car model sold.

  Vehicles such as Rolls-Royce, Mercedes-Benz or sports cars had a higher gross profit margin than the middle-class Japanese models.

  Mr Chan said the economic slowdown benefited the industry because buyers would consider a second-hand car first instead of a new car.

  The second-hand car business, which accounts for more than 80 per cent of the company's turnover, had increased 30 per cent this year from last year, he said.

  Mr Chan said the company would inject $60 million into the franchise plan and establish 150 franchisees within 18 months. The plan would start in February next year.

  He said 60 per cent of the company's car stocks were priced above $400,000.

  The second-hand car market was worth an estimated $7 billion last year. An industry source estimated an average annual market growth of 10 per cent, with sales of 40,000 units each year.



Listing plan for cashing up used car trade