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Li Ning goes public in Hong Kong China's leading enterprise in sporting and leisure footwear, apparel and accessories launched its initial public offering (IPO) yesterday in Hong Kong. The group, Li Ning Co Ltd, to be officially listed on June 28, expects to raise up to HK$550 million (US$70.54 million). The share price ranges from HK$1.76 (23 US cents) to HK$2.23 (29 US cents). The share offer comprises an international placement and a Hong Kong public offer, with 221,864,000 shares, which comprise 211,410,000 new shares and 10,454,000 sale shares. They will be allocated for subscription and purchased under international placing. The remaining 24,652,000 new shares will be allocated for subscription under the Hong Kong public offer. DBS Asia Capital Ltd is the global co-ordinator, and Bookrunner is the lead manager and sponsor of the IPO. Nearly half of the fund, or over HK$210 million (US$27 million), raised via the IPO will be spent on brand promotion and sales network expansion, in an attempt to maintain the company's dominant position in the Chinese mainland's sporting goods market. "Our top priority is to capture the full potential of our extensive distribution and retail networks to maximize revenues and profitability," said former Olympian Li Ning, chairman of the group, who is also referred to as China's "Prince of Gymnastics." As of May 31 this year, there were 2,500 Li Ning chain outlets, including franchised stores and directly managed shops, across China. And it plans to open another 1,000 stores by 2006. Li Ning sporting goods are very popular in the second and third-tier cities, given their high quality and relatively low prices compared with foreign brands such as Nike, Adidas and Puma. However, in the brand-conscious first-tier cities like Beijing, Guangzhou and Shanghai, Li Ning is less competitive. Brand and marketing promotion is the company's top concern. |
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