China’s boutique winery Grace Wine Holdings Limited is seeking flotation on Hong Kong’s Growth Enterprise Market (GEM) to raise an estimated HKD 70 million (USD 9.3 million) to expand capacity to meet demands from the fast growing Chinese market.
Trading of shares is expected to commence on 27 June, the indicative offer price is between HKD 0.30 and HKD 0.40 per share.
Grace Wine will become the first Chinese boutique winery to be listed on GEM, which was opened in 1999 as the second board market of Hong Kong Stock Exchange for companies not meeting requirements to be listed on the main board.
Majority of the net proceeds will be used in the construction of the second phase of Grace Wine’s new winery in the Northwestern Ningxia Province.
The first phase of this new winery had been completed in December last yeas and would become operational by harvest season this year, adding 390 tonnes or 18% of wine making capacity to the company.
With the capital expected to be raised from the public offering, the second phase construction is expected to be completed by the end of 2020, adding a further 260 tonnes or 12% capacity. The added capacity will allow Grace Wine to capture the fast growing Chinese wine market and increase market share.
Grace Wine’s original winery is located in Taiyuan city of Shanxi province, some 500km to the Southwest of Beijing, and is called Grace Vineyard. It was founded by Chinese-Indonesian businessman Chan Chun Keung in 1997. He passed the vineyard’s stewardship to his daughter Judy Chan in 2002, who at the time was working in American investment bank Goldman Sachs.
Ms Chan successfully established Grace Vineyard as a quality Chinese boutique winery. Vineyard areas have grown in size from the original 68 to 200 hectares.
Sales of Grace Vineyard wines saw a major boost after the company had solicited leading wine importer ASC Fine Wines to distribute six of its wine series in Mainland China. These are the Vineyard Series, Premium Series, Tasya’s Reserve, Deep Blue, Chairman’s Reserve, and Angelina’s Sparkling wines.