CHINESE BAIJIU BRAND ZHEN JIU TO RAISE USD812M IN HONG KONG IPO
By Siulan Law Mathews DipWSET
Source: ZJLD Group
Producer of Chinese baijiu brand Zhen Jiu, ZJLD Group, is seeking to raise up to HKD6.37 billion (USD811.5 million) in a Hong Kong initial public offering (IPO), the largest in Hong Kong this year.
According to filings to Hong Kong Stock Exchange today, ZJLD is offering 490.7m shares in a price range of HKD10.78 to HKD12.98 per share, allowing the company to raise between USD674m and USD811.5m.
ZJLD would be valued at USD5.4 billion if the top range of price is achieved on Thursday when the final price is set, this valuation is about 2 percent that of leading baijiu producer Kweichow Moutai.
ZJLD said the proceeds will be used to fund construction of production facilities, build brands, expand sales channels, automate business operations and replenish working capitals.
The company has six plants in China, three of them are in Southwest Guizhou province’s Zunyi town, where Kweichou Moutai is located.
ZJLD sells its products under flagship brand Zhen Jiu and five other brands including Li Du and Xiang Jiao.
The company was founded by Wu Xiangdong, 54, in 2003. Wu now controls 81 percent of the company through Zhenjiu Holding.
American private equity firm KKR & Co owns a 16.2 percent stake, which will be reduced to 13.8 percent after the IPO. Trading is expected to commence on 27 April.
ZJLD’s net income dropped 8.8 percent from a year ago to RMB712.2m (USD103.7m) in 2022, while revenue rose 17 percent to RMB4.2b, according to company statement.
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