Tingyi's Master Kong brand is the dominant player in the instant noodles market. [China Daily]
Tingyi (Caymen Islands) Holding Corp plans to raise as much as NT$17.1 billion ($532 million) in Taiwan depository receipts, the biggest offering by an overseas Taiwanese company returning to the island's stock market.
Tingyi, the largest noodle maker in China, plans to sell 380 million Taiwan depositary receipts at between NT$43 and NT$45 each, said Sinopac Securities Corp, its underwriter. The shares will be priced on Dec 8 and start trading Dec 16.
The Tianjin-based company, which is controlled by Taiwanese investors, joins companies including Want Want China Holdings Ltd in raising funds on the Taiwan exchange after the island eased restrictions on its capital markets last year as relations with the mainland improved.
"It's worth buying Tingyi for long-term investment," said Sam Hsieh, a Taipei-based fund manager at Fuh Hwa Investment Trust Co, who helps oversee the equivalent of $4.8 billion. "In the next three years, we can expect Tingyi's profit to continue growing and its share price to rise with the popularity of Chinese consumer shares."
Net income for the Hong Kong-listed company surged 41 percent to $179.4 million in the first half from a year ago, while sales rose 22 percent to $2.5 billion. The 17-year-old company, which runs 24 noodle factories and has bottling plants in almost every province in the mainland, is also benefiting from rising incomes.
Tingyi rose 1.64 percent to HK$19.82 ($2.55) in Hong Kong trading yesterday. The shares have more than doubled this year, compared with the 56 percent advance in Hong Kong's Hang Seng Index and 68 percent surge in the Taiwan Taiex Index. Each Tingyi stock in Hong Kong will be equivalent to two Taiwan shares, the underwriter said.
Its Master Kong-brand instant noodles continue to lead in the mainland with a market share of 50.8 percent by sales value according to a survey by ACNielsen, a global marketing research firm, at the end of 2008.
Its competitors Hualong Group and Baixiang Food Group hold a market share of 12.6 percent and 8.2 percent respectively, the survey said.
Want Want shares in Taiwan have risen 60 percent since they started trading on the exchange in April, the first Taiwan depositary receipt to list after the rules were eased. The gain outperformed the 48 percent advance in its Hong Kong-listed stock.
