Taiwan-listed shares of Tingyi (Cayman Islands) Holding Corp (康師傅控股), China’s biggest maker of instant noodles and ready-to-drink tea, were limit-up on their first trading day on the back of a strong China’s economic growth.
Tingyi’s Taiwan depositary receipts (TDRs) climbed 7 percent to NT$48.15 (US$1.5), beating the main index’s 1.63 percent increase.
In Hong Kong, Tingyi slipped 5.16 percent, steeper than the Hang Seng Index’s 0.93 percent drop.
PHOTO: BLOOMBERG
The company priced its 380 million TDRs at NT$45 each, expecting to raise NT$17.1 billion in capital from the issuance. It is the biggest such offering by a Taiwan-owned, China-focused company since the government eased restrictions in hopes of stimulating local capital markets by encouraging firms to list on the domestic bourse.
Tingyi chairman and CEO Wei Ing-chou (魏應州) told investors on Tuesday that the company aimed to allocate nearly 90 percent more in capital spending next year, or up to US$500 million.
Of that, 80 percent would go to expanding production of beverages, a fast growing segment in which it aims to grow at four times the pace of GDP growth in China next year, he said.
The company will also spend around US$100 million next year to expand its noodle business in China, where it expects 10 percent to 12 percent growth in noodle sales.
Within five years, it aims to raise the annual revenue from at least five products to US$10 billion each, a figure equivalent to its total sales this year, Wei said.
Separately, Neo-Neon Holdings Ltd (真明麗控股), the world’s biggest maker of decorative lights, which is listed on the Hong Kong stock market, is oversubscribed by 16 times for its secondary offer of NT$12.9 TDRs, underwriter Fubon Securities Co (富邦證券) said yesterday.
The company’s diversification into the fast-growing LED lighting sector, especially in China, made Neo-Neon appealing to investors, Fubon Securities said.
Neo-Neon, founded by Taiwanese Ben Fan (樊邦弘), landed an additional order of 10,000 LED street lamps this month from the Jiangsu Province local government in China, bringing total orders from China to 100,000, Stephen Chan (陳恩光), a Fubon Securities senior vice president, said in a press release.
The progress gave Neo-Neon the upper hand in winning more orders from Chinese local governments. LED street lamp installations in China should increase to 2.5 million units over the next three years as requested by the central government, Chen said.
Neo-Neon planned to ship the LED lamps in the first quarter of next year, Chen said.
The lamp maker is set to sell 140,000 TDRs next Tuesday, which will help it raise NT$1.8 billion in funds to expand capacity.
Each TDR represents 0.5 common shares of Neo-Neon.
The company planned to buy 30 units of metalorganic chemical vapor deposition for its LED plant in Yangzhou.
In August, the China Environment Fund bought an 11 percent stake in Neo-Neon for US$30 million and became its biggest institutional investor, indicating that Neo-Neon has good chances on China’s LED market.
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