Taiwan food vendor's Shanghai unit to seek China listing

2018/01/20 18:15:33 fontsize-small fontsize-default fontsize-big
Taiwan food vendor's Shanghai unit to seek China listing

Taipei, Jan. 20 (CNA) Namchow Holdings Co., one of Taiwan's major food suppliers, said Saturday that its subsidiary in Shanghai will file an application with the authorities in China to launch a listing there.

Namchow said that the listing of Namchow Group (Shanghai) is aimed at helping the subsidiary strengthen its long-term development in the growing China market.

The food vendor said the listing as A shares in China is scheduled to take place in 2019 at the earliest to make Shanghai Namchow the first Taiwanese food firm to raise funds through a stock listing in the capital market in China.

Namchow's A share listing plan is the second one in a week after Hon Hai Precision Industry Co., the world's largest contract electronics maker announced Wednesday that its Internet unit -- Foxconn Industrial Internet Co. (FII) -- will seek a share listing in China.

Companies listed on China's exchanges offer two classes of shares: A shares denominated in Chinese yuan for Chinese investors to trade, and B shares denominated in U.S. or Hong Kong dollars for foreign investor trade.

Namchow said the Shanghai unit specializes in a wide range of products, including frozen dough, cream and edible oil, with a paid-in capital of 360 million Chinese yuan (US$56.25 million).

The Shanghai subsidiary operates a broad production base in China with plants in Shanghai, Tianjin and Guangzhou. In 2017, the unit spent NT$2.1 billion (US$71.19 million) to build a new edible oil plant in Shanghai.

Last year, the Shanghai unit posted about NT$1.2 billion in profit on revenue of nearly NT$10 billion, Namchow said.

Currently, the parent company owns a 96.15 percent stake in the Shanghai unit, Namchow added.

For its part, Hon Hai, known as Foxconn in the global market, said the FII A share listing is aimed at raising funds used in a wide range of industries such as Internet communication, cloud technology-based computing, smartphone component development and tech solution services.

In addition, FII will use the proceeds from the A share listing to repay part of its bank loans, while the funds raised from the share listing are expected to boost its liquidity, Hon Hai said.

According to Hon Hai, FII is planning to sell a 10 percent stake through the A share listing, although no timeframe for the listing was immediately available.

Hon Hai said an A share listing by FII will not affect the listing status of the parent company in Taiwan and Hon Hai's shares will continue to be traded on the local main board.

(By Han Ting-ting, Wei Shu and Frances Huang)
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