China shoe maker to list on Bursa

Published: 2009/06/16


China-based Multi Sports Holdings Ltd, a manufacturer of sport shoe soles scheduled for listing on Bursa Malaysia's Main Board next month, plans to use part of the RM57.6 million proceeds to set up a new plant.

The new plant will be located at a site close to its existing factory in Jinjiang City, Fujian Province.About RM30 million from the proceeds is expected to be utilised for the building construction and purchase of machinery.

Multi Sports executive chairman and chief executive officer Lin Huo Zhi, in providing the details, said the main aim behind the listing was to raise funds for the group to increase its current production capacity of 22 million pairs of shoe soles per year.

Though operating round-the-clock in three shifts seven days a week except for a two-week break during the Chinese New Year holidays, the company has not been able to keep up with rising demand from the domestic market, Lin said during a media visit to Jinjiang.

He said with the new plant, the production capacity could be increased to 55 million pairs of shoe soles per year, adding that with its current output, the group already has about one per cent share of China's shoe soles market.

Construction of the new plant is scheduled to start in the fourth quarter of this year with production to begin in the third quarter of 2010, said Lin who started the business in 1999.Multi Sports is the second China-based company to announce its listing on Bursa Malaysia through initial public offering (IPO), following Xingquan International Sports, a manufacturer of sports shoes.

This followed changes introduced by Bursa Malaysia and the Securities Commission which made it easier for foreign companies to list their shares in Malaysia.From the IPO comprising 108.6 million ordinary shares, 18 million is allocated for the public, 39.6 million for private placement and the remaining 51 million, which belongs to existing shareholders, will be made available to select investors.

After the IPO, a 15 per cent stake in Multi Sports will be held by GuoLine Group Management Co Ltd, which is indirectly owned by Hong Leong Company (Malaysia) Bhd.The group's listing exercise is being handled by AmInvestment Bank Bhd, which is the sole underwriter and placement agent.

Multi Sports' profit has grown from RM24.65 million in 2006 to RM46.83 million last year and it proposed to pay out at least 20 per cent of its profit as dividends each year.In Jinjiang, known as "China's Shoe Capital", most of the businesses are connected to the shoe manufacturing industry, ranging from providing shoe materials, producing shoe soles to the final assembly.

The city is also considered as the world's biggest producer of sport shoes, being responsible for 20 to 24 per cent of the world's production. - Bernama