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.
STAYING AHEAD: Fitch said that TSMC remains technologically ahead of others, but Samsung is building a new chip fab, while China is investing in its domestic industry As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said. “We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday. “By working with TSMC, US chipmakers will not face the financial burden of incremental investment
DIVERSIFICATION: Although COVID-19 would push more companies to produce in emerging markets, DBS said that it was unlikely that firms would totally leave China Geopolitical tensions and supply disruptions are expected to accelerate the migration of manufacturing out of China, as concerns about the risk of production concentrated in one country increase, S&P Global Ratings said. Although its economic expansion might be weaker than previous levels due to the accelerated relocation of manufacturing, China’s economic growth would still be stronger than that of most other economies, the ratings agency said. “While absolute growth rates will moderate, we believe China’s economic performance will continue to be a key sovereign credit support,” S&P Global Ratings credit analyst Tan Kim Eng (陳錦榮) said in a statement on Thursday. “Its growth
Taiwan’s corporate landscape has changed significantly over the past 20 years, with Hon Hai Precision Industry Co (鴻海精密) replacing Formosa Plastics Corp (台塑) as the revenue leader, while Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) has emerged as the most profitable firm, a survey of Taiwan’s 50 largest companies published on Tuesday last week showed. The Chinese-language CommonWealth Magazine survey ranked Taiwan’s 50 largest companies based on their revenue last year, and compared them with the results of a similar survey it conducted in 2000. Only 33 companies on the original list remained in this year’s rankings, the survey found, following two
GEOPOLITICAL RISKS: Beijing announced plans to strengthen ‘enforcement’ in Hong Kong, sparking losses across Asia led by the Hang Seng’s 5.6 percent plunge Local shares on Friday ended sharply lower amid renewed tensions between the US and China over Chinese telecommunications equipment giant Huawei Technologies Co Ltd (華為) and China’s plan to introduce a national security law in Hong Kong. The TAIEX on Friday finished down 197.16, or 1.79 percent, at 10,811.15 on turnover of NT$177.183 billion (US$5.9 billion), almost flat from a close of 10,814.92 on May 15. The market was down across all major sectors, in particular electronics shares, which finished down 1.99 percent from Thursday’s close. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest wafer foundry and a chip supplier