A Namchow Holding Co (南僑投資控股) subsidiary is expected to become the first Taiwanese food firm to launch an initial public offering (IPO) in China at a time when many local companies are eyeing high valuations in the nation’s equity market.
Namchow Holding on Friday last week held a special general meeting, during which it secured approval from shareholders to take Namchow Food Group (Shanghai) Co (上海南僑食品集團) public on the Shanghai Stock Exchange.
The unit is planning to submit an IPO application to the China Securities Regulatory Commission in the third quarter.
The IPO is likely to take place at the end of the year or early next year, analysts said.
Expectations that the IPO is to proceed quickly rose after the commission on Thursday approved Foxconn Industrial Internet Co’s (FII, 富士康工業互聯網) 27 billion yuan (US$4.26 billion) IPO on the Shanghai Stock Exchange.
FII, an Internet-focused unit of Hon Hai Precision Industry Co (鴻海精密), obtained a green light just 36 days after applying.
The speedy review represents a sharp departure from the commission’s usual practice of taking more than a year to review an IPO plan.
FII’s offering is likely to be launched by the end of this month.
Namchow Holding said it has been preparing for the Shanghai IPO for about a year, and since China is opening its doors to allow more listings, it is expected to proceed smoothly as yuan-denominated A shares.
Namchow Holding chairman Alfred Chen (陳飛龍) said the company has operated in the Chinese market for 21 years and the planned IPO aims to raise funds to further expand operations there, while looking to international markets.
Namchow Shanghai, which is capitalized at 360 million yuan, has focused its business on edible oil and frozen dough, while operating several restaurant brands.
If the IPO is successful, Namchow Shanghai’s market visibility would improve, which will help it raise more funds and attract talent, Chen said.
Namchow Holding last year generated NT$17.2 billion in consolidated sales, up 5.42 percent from 2016, with its China operations contributing about NT$7 billion.
The company aims to increase its revenue to NT$20 billion by 2020, with China sales expected to contribute NT$10 billion.
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