Hong Kong IPO could raise more than $500 million

Hong Kong IPO could raise more than $500 million

People familiar with the matter said that a Hong Kong initial public offering could raise more than $500 million, according to Bloomberg Guizhou Guotai Liquor Group Co.Guotai Liquor Group Co., a Chinese white liquor brand.

The people said that the company is working with advisers on the potential first-time share sale, but they asked not to be identified as the information isn't public. They said that a listing could happen as soon as this year.

The people said that details of the offering, such as size and timing, could change at an early stage. A representative for Guotai didn't respond immediately to requests for comment.

The country reforms its listing system, Bloomberg News has reported, depriving them of higher valuations onshore, and some of the companies banned from IPOs on China's domestic stock exchanges. Guotai filed for a possible IPO in Shanghai in 2020, according to a preliminary document.

Guotai would join other companies that make baijiu, a strong-flavored white liquor, in seeking listings in Hong Kong. People familiar with the matter said that Zhen Jiu, a rival brand, is considering raising as much as $400 million in a listing in the Asian financial hub this year.

Baijiu has been a staple of Chinese dining tables for a long time. The high-end brands such as those produced by Kweichow Moutai Co. and Wuliangye Yibin Co. have gained favor with investors because of their high margins and resilience of their sales amid economic turmoil, although they have sometimes been targeted in President Xi Jinping's anti-corruption campaigns.

Guotai, founded in 1999, sells high-end white liquor for as much as 2,999 yuan $442 a bottle, according to its website. The website shows that sales including tax exceeded 10 billion yuan in the year 2021. The company is based in Guizhou, home to some of the country's best known liquor brands, which use water from nearby mountains.

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