Chinese liquor company ZJLD Group Inc. raised HK$5.3 billion ($675 million) in Hong Kong’s largest initial public offering this year, after pricing shares near the bottom of a marketed range, according to people familiar with the matter.
(Bloomberg) — Chinese liquor company ZJLD Group Inc. raised HK$5.3 billion ($675 million) in Hong Kong’s largest initial public offering this year, after pricing shares near the bottom of a marketed range, according to people familiar with the matter.
The KKR & Co.-backed firm sold about 490.7 million shares at HK$10.82 each, the people said, asking not to be identified as the information is private. The shares were marketed at HK$10.78 to HK$12.98. Their first day of trading is slated for April 27.
A representative for ZJLD didn’t immediately respond to a request for comment.
The offering injects some activity back into Hong Kong’s IPO market, which hasn’t hosted a listing larger than $150 million this year. Slow activity in the Asian financial hub is in line with other major venues such as New York and London, as high interest rates and volatile equities trading have kept large issuers on the sidelines.
ZJLD Group’s expected debut next week would make it the first Chinese maker of the white spirit known as baijiu to list outside mainland China. Such liquor brands have found favor with investors due to their high margins and the resilience of their sales amid economic turmoil, though they have sometimes been targeted in President Xi Jinping’s anti-corruption campaigns.
The company was founded in 1975 as a state-backed project in Guizhou province, according to its prospectus, in a town only about a two-hour drive away from the birthplace of Kweichow Moutai Co.’s famed brand. It reported net income of 1 billion yuan ($145 million) in 2022, largely unchanged from the year before.
Founder and chairman Wu Xiangdong will own about 69% of the company following the listing, while KKR will control about a 14% stake, the prospectus shows. In 2010, KKR bought a stake in Wu’s Shenzhen-listed retailer Vats Liquor Chain Store Management JSC. About a decade later, the private equity firm sealed its first investment in ZJLD and raised its stake in 2022.
Goldman Sachs Group Inc. and China Securities International are the sponsors of the listing, while China International Capital Corp. and KKR have junior roles arranging the deal.
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