Cup Noodles Maker Nissin Firms Up Hong Kong IPO

Japanese instant noodle-maker Nissin Foods hopes to raise up to HK$1.13 billion ($145 million) in a Hong Kong initial public offering (IPO) for its China spin-off.

The company, best known for brands like Cup Noodles and Demae Itcho, launched its IPO roadshow Monday. Nissin will issue a total of 269 million shares, including 242 million in the international tranche and 26.858 million in the Hong Kong offering, according to documents seen by Caixin.

The shares will be priced at HK$3.45 to HK$4.21 each, and the listing on the main board of the Hong Kong Stock Exchange is expected take place on Dec. 11.

Founded in 1948 by Momofuku Ando, who claimed to have invented instant noodles, Nissin is the fifth largest instant noodle company by sales value on the Chinese mainland, and the largest in Hong Kong, according to the company.

Nissin has secured eight cornerstone investors for the planned IPO, including Itochu Corp. and Snow Lake China Master Long Fund. The company plans to use its IPO proceeds to expand production capacity, form strategic partnerships and make acquisitions in China, and expand its sales and distribution network, among other aims.

Rapid urbanization and longer work hours powered an instant noodle boom in China in the 2000s. The industry grew from 34.8 billion yuan ($5.2 billion) in 2003 to 59 billion yuan in 2008, according to government figures.

After 2013, a combination of economic and social factors slowed the market’s growth. Food delivery services, now ubiquitous in Chinese cities, now target customers craving convenience food. At the same time, China’s dependence on migrant workers is shrinking, reducing an important source of customers for instant noodle makers.

However, “the growth of the Hong Kong instant noodle market expects to recover and the PRC instant noodle market is likely to remain a steady growth,” Nissin said, citing research by Frost & Sullivan.

Contact reporter Teng Jing Xuan (jingxuanteng@caixin.com)