Chinese restaurant operator Jiumaojiu International Holdings has announced plans to become the first initial public offering (IPO) in Hong Kong next year. The company stated that it intends to take advantage of China's overall consumption boom by listing its stocks in the city next month.
Jiumaojiu International Holdings will be selling 333.4 million shares during its listing with prices ranging from HK$5.50 and HK$6.60 per share. At the higher end of the range, the company could raise as much as HK$2.2 billion ($282 million) during its IPO. The initial pricing could is still subject to change depending on demand and investor sentiment.
Around 300 million shares will be offered to international investors, while 33.34 million will be offered to Hong Kong residents. The IPO will officially be launched today, December 30, while the stock will be publicly traded on January 15.
The restaurant chain operator's chairman and chief executive officer, Guan Yihong, mentioned in a statement the company felt like it was the right time to list its shares given the increased confidence in Hong Kong's investment market. Guan also stated that listing in the city is part of its long-term strategy and future development.
Jiumaojiu International Holdings currently has 328 stores in China under five different brands. Two of the five brands, namely Tai Er and Jiumaojiu, are considered the company's core business units, contributing an estimated 98 percent of its total turnover.
Tai Er, in particular, has managed to exceed expectations this year. The restaurant, which serves its signature pickled fish dish, has managed to experience a massive expansion boom in China and has recently been ranked as the best sauerkraut fish restaurant in the country by critics.
The Guangzhou-based company stated that it will be using the proceeds of its share sale to further expand its operations. The company stated that it will use around 72 percent of the IPO proceeds for its plans to triple its physical outlets too as many as 2,021 restaurants. Around HK$210 million will go towards paying the company's existing debts. The rest of the proceeds will be used towards strengthening its supply and support capabilities.
The announcement of what would likely be Hong Kong's first IPO next year is a big boost for the exchange and a big jump start to another stellar year. The Hong Kong Stock Exchange managed to outperform its main competitors, the New York Stock Exchange and the NASDAQ, to become the world's top IPO destination for 2019.
