Taiwan's Grace plans Shanghai IPO
Updated: 2007-07-24 08:36
Taiwanese-invested electronics and plastics company Grace THW Group plans to list its epoxy business on the Shanghai stock market next year and the whole of its electronics business in Hong Kong in 2009.
Winston Wong, CEO of Grace THW and eldest son of the Taiwanese plastics tycoon Wang Yung-ching, said yesterday in Shanghai that its Guangzhou Epoxy Base Electronic Material Corp has contracted BOC International (China) Ltd as a brokerage for the yuan-denominated A-share listing.
Wong said he hopes to raise at least $100 million for the expansion of the group's electronics businesses in Guangzhou, Shanghai and Wuxi through an initial public offering scheduled for September 2008.
There are currently only five Taiwanese-invested businesses on the mainland with their shares traded on the A-share markets in Shanghai and Shenzhen.
"Most of our factories on the mainland have the best technologies in the business, both in China and the world, but the sizes are very small due to a shortage of capital," said Wong, who started his mainland business in Guangzhou in 1996, after breaking off from his father, founder of Formosa Plastics, in 1995.
Grace THW, different from its peers from Taiwan, has all its investments on the mainland and no material presence in Taiwan.
Wong plans to list all its four electronics businesses in Hong Kong in 2009. The four companies, located in Guangzhou, Shanghai and Wuxi, work along the full industrial chain in clad copper laminate, a key component for printed circuit boards used in computer mainboards, automobile electronics, mobile phones and MP3 players.
Last year, Grace THW earned revenue of $900 million, with 60 percent of it coming from its electronics businesses. Sales by the group are expected to reach $1 billion this year.
Eleven years ago, when Wong founded Grace THW, capital was one of his largest problems. It remains so today, as the honorary doctor of science from Imperial College London wants to build an electronics and plastics empire on the mainland as big as his father's in Taiwan.
Its two factories in Shanghai, which make fiberglass and cloth out of sand and stone, are in need of capital.
The factories have just one furnace, which burns sands and clay into fiberglass, while his father's similar business in neighboring Suzhou has two. Grace THW plans to add another two furnaces, but each costs $120 million, so he regards a public offering as a key to easing the capital shortage.
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