Chinese liquor company ZJLD Group Inc. is seeking to raise as much as HK$6.37 billion ($812 million) through an initial public offering that is set to be Hong Kong’s largest this year.
(Bloomberg) — Chinese liquor company ZJLD Group Inc. is seeking to raise as much as HK$6.37 billion ($812 million) through an initial public offering that is set to be Hong Kong’s largest this year.
The company is offering 490.7 million shares at HK$10.78-HK$12.98 each, according to a statement to the Hong Kong stock exchange. Its first day of trading is slated for April 27.
ZJLD’s listing could boost the city’s tepid IPO market, which has only seen about $860 million raised so far this year, according to data compiled by Bloomberg. The slow activity in the city is in line with other major fundraising venues such as New York and London, as high interest rates and volatile equities trading have kept large issuers on the sidelines.
At the top of the price range, ZJLD’s first-time share sale is poised to be the largest in the Asian financial hub since Sunshine Insurance Group Co. Ltd.’s $859 million listing in December, according to data compiled by Bloomberg.
The expected debut will make ZJLD the first Chinese maker of the white spirit known as baijiu to list outside the mainland. Such liquor brands have found favor with investors due to their high margins and the resilience of their sales amid economic turmoil, though they have sometimes been targeted in President Xi Jinping’s anti-corruption campaigns.
ZJLD was founded in 1975 as a state-backed project in Guizhou province, according to its prospectus, in a town only about a two-hour drive away from the birthplace of Kweichow Moutai Co.’s famed brand. Its flagship brand “Zhen Jiu” means “treasure of liquor” in Chinese. The company’s gross profit margin in 2022 [P.4/5] was 55.3% and its net income was about 1 billion yuan ($146 million), the prospectus shows.
Goldman Sachs Group Inc. and China Securities International are the sponsors.
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