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China Hai Sheng Holdings, the mainland's largest
apple juice concentrate producer plans to raise HK$200 million to HK$250
million in an initial public offering on the main board in September, according
to sources close to the deal.
The company has submitted applications to the China Securities Regulatory
Commission and Hong Kong stock exchange and is awaiting a listing hearing by
SAR regulators.
CLSA has been hired as the sole arranger of the share sale, said people familiar
with the deal.
Proceeds from the sale will chiefly go to building a new processing center to
increase export sales.
Hai Sheng, founded in 1996 and based in Shaanxi, currently operates three plants
with combined production capacity of 100,000 tonnes a year, which it aims to
increase to 140,000 tonnes by the end of this year.
Thanks to rapid growth over the past nine years, Hai Sheng has become largest
apple juice producer in China with a 16 percent market share. It now supplies
around 10 percent of the world's apple juice consumed.
``[The management] has set a target to be the largest apple juice concentrate
producer with over 30 percent of market share in the world market in the coming
years,'' say people familiar with the company. In a move to meet the huge
overseas demand, the company has just set up a new plant in Shaanxi with a
total investment of 200 million yuan.
The company is also the apple juice concentrate provider for several global
beverage players such as Coca-Cola, Pepsi and Nestle.
According to China's customs information center, apple juice concentrate exports
rose from less than 5,000 tonnes in 1993 to 292,000 tonnes in 2002. Last year,
486,000 tonnes of concentrate was exported.
Weinan and Shaanxi are the largest producing areas in the country.
Analysts predict that mainland apple juice concentrate exports will account for
about 60 percent of world consumption by 2007.
China was the largest apple growing country in the world last year, producing
25 million tonnes and accounting for 45 percent of global consumption, beating
traditional giants such as the United States and Germany.
Hai Sheng's domestic competitor, Yantai North Andre Juice, which listed on the
Growth Enterprise Market in 2003, is the only locally listed juice-maker and
currently trading at 10.48 times 2005 earnings. kc.wong@singtaonewscorp.com
carol.chan1@singtaonewscorp.com
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