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Toh Han Shih

While big initial public offerings are shunning the city's stock market at this time, two companies yesterday announced plans to raise a combined HK$2.1 billion.
Cosmo Lady (China) Holdings and Changgang Dunxin Enterprise both announced they would list on the stock exchange's main board on June 26.
Cosmo Lady, the largest branded intimate wear company on the mainland by revenue, plans to raise gross proceeds of up to HK$1.79 billion.
It is offering 406.46 million shares at between HK$3.27 and HK$4.42 per share.
Changgang Dunxin, a paper product manufacturer based in Fujian province, plans to raise net proceeds of HK$324 million by offering 248.2 million shares at HK$1.40 each.
Cosmo Lady chairman and chief executive Zheng Yaonan said the company's choice to list in Hong Kong amid weak market sentiment was a carefully considered decision.
"Hong Kong is a major international and mature capital market. We hope in future to be a major global brand. The Hong Kong IPO will be a big help in this," Zheng said.
He gave no details of his company's international plans.
Currently, all of Cosmo Lady's sales are on the mainland, where it had the biggest share of the fragmented intimate wear market of 2.8 per cent last year, compared with the second-biggest player's share of 0.9 per cent, according to Frost & Sullivan.
As of the end of last year, Cosmo Lady's retail network comprised 5,790 franchised and self-managed outlets.
The company plans to use HK$568.3 million of the listing proceeds on opening 2,000 self-managed retail outlets on the mainland by 2018, up from 721 as at the end of last year, according to its prospectus.
It also plans to spend a further HK$368.7 million on establishing three logistics centres - in Dongguan, Chongqing and Tianjin.
Cosmo Lady's revenue grew at a compound annual growth rate of 32.7 per cent from 1.66 billion yuan (HK$2.07 billion) in 2011 to 2.92 billion yuan last year, while its net profit increased 27.8 per cent from 168.6 million yuan to 275.5 million yuan over the same period.
The company's underwear products are promoted by Taiwanese model Lin Chi-ling.
Earlier this month, Chinese carmaker BAIC Motor put on hold its US$2 billion share sale in Hong Kong, while in April, WH Group, the world's largest pork producer, shelved its US$1.9 billion listing.
Meanwhile, Changgang Dunxin will use 76.3 per cent of its listing proceeds on expanding production capacity of paperboard products, the company said in a press release.
The company made a net profit of 142.7 million yuan from revenue of 1.02 billion yuan last year. Revenue was 349.7 million yuan in the first four months of this year.


Cosmo Lady, Changgang Dunxin to break Hong Kong's IPO doldrums

Cosmo Lady executives (from left) Yu Chun-kau, Zheng Yaonan and Zhang Shengfeng pose in Hong Kong yesterday with models wearing their products. Photo: Edward Wong

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Markets & Investing

Cosmo Lady and Changgang Dunxin set to tap city's stock market for HK$2.1 billion


While big initial public offerings are shunning the city's stock market at this time, two companies yesterday announced plans to raise a combined HK$2.1 billion.
