Chinese Bottled Water Giant Nongfu Spring Prices $1.08 Billion HK IPO

What’s new: Chinese bottled water producer Nongfu Spring will raise HK$8.35 billion ($1.08 billion) in its Hong Kong initial public offering (IPO) after pricing its shares at HK$21.50 each, according to people close to the company’s board.

The price is at the top of a range the company suggested last week. At this price, the company will be valued at more than HK$240 billion ($31 billion).

Nongfu is offering 388.2 million shares, 7% of which will be sold in Hong Kong and 93% on global market. Six cornerstone investors led by U.S. fund manager Fidelity, New York hedge fund Coatue and Singapore sovereign wealth fund GIC, have subscribed for a total of 115 million shares.

Nongfu will start trading Sept. 8 on the Hong Kong Stock Exchange.

The background: Founded in 1996, Nongfu Spring claims to be China’s largest packaged water supplier.

For the first five months of 2020, the Hangzhou-based company posted a net profit of 1.93 billion yuan, down 18% from the same period last year. Its revenue declined more than 12% to 8.66 billion yuan.

The company blamed the Covid-19 pandemic for the revenue drop but stressed that it has enough financing and operating cash flow that the health crisis won’t have a significant negative impact on the company’s 2020 earnings and long-term development.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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