Chu Chi-wen, chief financial officer for Want Want China, which is listed in Hong Kong as Want Want China Holdings Ltd., said an application for TDRs will be submitted to the Taiwan Stock Exchange. "We are doing this in response to the [ROC] government's policy aimed at encouraging Taiwanese firms to come back home to list."
Chu explained that the Want Want China Holdings will use shares held by its major stakeholders, including Hot-Kid Holding Ltd., to make the offering of TDRs. Hot-Kid reportedly would sell up to 250 million shares, or 1.89 percent of Want Want China.
Tsai Eng-meng, chairman of Want Want China, met with ROC Premier Liu Chao-shiuan on Sept. 8 to report the project and hosted an explanation session for institutional investors the next day, covering the group's deployment in mainland China and details of the TDR project.
To facilitate the TDR issuance, Tsai said he will release his personal stake in Want Want China Holdings for the float instead of issuing new shares.
According to Chu, Want Want China would retain its primary listing in Hong Kong launched in March. Since then, the group has expanded beyond its core business of making rice snacks by purchasing hotels and an insurance firm in Taiwan on expectation of better cross-strait trade ties.
Want Want China will be the first mainland-based Taiwanese company to apply for a second listing on the island's bourse since the new Kuomintang administration relaxed cross-strait investment restrictions July 31. The government scrapped a previous ban, which prohibited firms with more than 20 percent of their capital controlled by Chinese mainlanders to make a second listing on the TWSE.
The Cabinet-level Financial Supervisory Commission has been soliciting Taiwanese enterprises in mainland China and other areas around the world to list their shares on the Taiwan stock market in a bid to develop the island into a regional funding center.
According to local news reports, Want Want China earned US$129 million in the first half of 2008, with its core businesses of rice cracker, beverage and snacks all recording 30 to 50 percent profit growths. The company attributes its performance to success in expanding sales channels in mainland China, where its outlets are expected to be in the top 500 within two years.
Want Want China plans to spend US$150 million to US$200 million on factory expansion in mainland China through 2009, Chu said. This figure was US$180 million in 2008.
The snack maker, which began operations in Taiwan in 1962 and today employs over 60,000 people, has a market value of around US$6 billion and earns about 90 percent of its revenue by selling rice crackers, snacks and drinks in the world's most populous nation. Want Want China's retail sales rose by at least 19 percent in each of the first seven months this year and increased by 23.3 percent in July.
Write to Eric Chao at clchao@mail.gio.gov.tw