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| Friday, 25 March 2016, 10:27 HKT/SGT | |
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| Sino Grandness will list unit outside of S'pore, closer to China |
HONG KONG, Mar 25, 2016 - (ACN Newswire) - Mainboard-listed Sino Grandness Food Industry Group aims to spin off its beverage unit to list outside of Singapore.
 | | Sino Grandness' loquat juices under the Garden Fresh brand recorded revenue of $2.3 billion in China in the year ended Dec 31, accounting for nearly 70 per cent of total turnover. |
The Shenzhen-based producer of fruit juices and canned fruit and vegetables will take its most profitable business and establish it as a separate public company to be closer to mainland China, said chairman and chief executive Huang Yupeng in a phone interview with The Straits Times yesterday.
"The beverage business has the potential to grow to be a 20-30 billion yuan (S$4 billion to S$6 billion) business in a big market like China," said Mr Huang, in Mandarin.
"A listing in a market just on the doorstep of the mainland will allow our Chinese customers to better understand the company's developments."
Originally a canned food maker selling mainly to Europe, Sino Grandness added a beverage unit after listing in Singapore in 2009.
Its loquat juices under the Garden Fresh brand recorded revenue of $2.3 billion in China in the year ended Dec 31, 2015, accounting for nearly 70 per cent of total turnover.
The move to spin off the unit has been two years in the making, and the company is in the "final stages" of its preparations for an initial public offering, said Mr Huang.
Sino Grandness' share price has more than doubled in the past two months, closing at an 18-month high of 66.5 cents yesterday.
Mr Huang believes this is due to stronger investor confidence. "We announced a good set of full-year earnings results last month, and our branding has vastly improved due to our sponsorship of several popular TV programmes in China."
Revenue last year rose 17.5 per cent to 3.3 billion yuan, thanks to higher sales in the beverage business and canned products in the domestic market. But it was partially offset by lower sales of canned products overseas.
But full-year earnings suffered a 17 per cent drop to 206.7 million yuan. Mr Huang said this was mainly due to non-cash charges in relation to convertible bonds such as non-cash interest expenses and changes in fair value of the option derivatives.
"Our business is still growing very fast, given the immense demand of Chinese consumers. Our canned food sales in the domestic market have grown to match the size of our export sales."
While China will remain its main market, the firm is also looking to expand to South-east Asia, using Singapore as a launchpad.
"We will start exporting our loquat juices and canned fruit and vegetables to Singapore in the second half of the year, through which we will sell to Indonesia, Malaysia and Thailand," Mr Huang said.
Topic: Press release summary
Sectors: Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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