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Giant plans to list subsidiary shares in China

2019/03/22 15:48:07

Taipei, March 22 (CNA) Giant Manufacturing Co., one of Taiwan's leading bicycle brands, is planning to take a subsidiary located in China's Kunshan to public in the China stock market.

In a filing posted on the Taiwan Stock Exchange (TWSE) Thursday, the bicycle brand said Giant Light Metal Technology (Kunshan) Co., which manufactures finished and semi-finished aluminum industrial products, is planning to seek approval from Chinese securities authorities to launch an initial public offering (IPO) of its shares as a Chinese yuan-denominated A-share in China.

According to Giant, the subsidiary has taken the lead over peers in aluminum material production for the bicycle and motorcycle market in East China.

The listing aims to speed up Giant's pace of expanding business in China and attracting professionals to work for the company, which is expected to boost the company's influence and integrate the company's resources.

Giant said the A-share listing is also expected to provide additional funding to the company and strengthen the company's financial structure. The face value of the A-shares has been set at 1 yuan (US$0.15), while the amount of the share sale has not been finalized.

Despite the A-share listing, Giant said the company will still hold a controlling stake in the subsidiary.

A board meeting held Thursday approved the A-share listing plan of the subsidiary, Giant said.

Meanwhile, Giant announced that the company has benefited from rising demand for electric bikes in the European market. Its net profit rose 39.4 percent from a year earlier to NT$2.86 billion (US$92.86 million) in 2018, with earnings per share of NT$7.64.

In 2018, Giant posted NT$60.24 billion in consolidated sales, up 9.1 percent from a year earlier, the company said.

However, sales in China fell about 20 percent from a year earlier in 2018 due to weaker demand in China, where enthusiasm for bike- sharing has faded, but after falling sales in the first three quarters, revenue in China stabilized in the fourth quarter.

Despite the sales decline, Giant said the company remains a leading cycle brand in China.

Giant said sales of the company's electric bikes hit 500,000 units in 2018, accounting for about 19 percent of the company's total sales.

The company said its electric bikes sold to the European and U.S. markets were provided by plants in Taiwan and the Netherlands, adding that one of its plants in Hungary is scheduled to begin operations in the first half of next year to roll out traditional and electric bikes to meet rising market demand.

Giant said the board of directors has approved a proposal for the company to issue NT$4.6 in cash dividends for its 2018 earnings and the dividend proposal is pending approval from an annual general meeting scheduled for June.

On the back of the A-share listing by its unit and the company's net profit growth in 2018, Giant shares rose to 2.47 percent to close at NT$207.50 on the local main board Friday, when the weighted index ended up 0.28 percent at 10,639.07 points.

(By Pan Chih-yi and Frances Huang)
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