CR Beverage (02460.HK) launched its public offering on October 15, with the subscription period open until October 18. The company plans to issue 350 million shares, with the offering price ranging from HKD 13.5 to HKD 14.5 per share, aiming to raise a maximum of HKD 5.04 billion. Each lot consists of 200 shares, requiring a minimum entry investment of approximately HKD 2,929.2 per lot. The stock is scheduled to begin trading on the Hong Kong Stock Exchange on October 23. UBS, BOC International, CITIC Securities, and Bank of America Securities are serving as joint sponsors for the IPO.

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China Resources Beverage (02460.HK)

China Resources Beverage (02460) is launching its IPO today (October 15th). The beverage subsidiary of China Resources Group, a significant competitor to Nongfu Spring (09633), plans to issue 350 million shares, with 11% offered for public sale in Hong Kong. The oversubscription price range is HKD 13.5 to HKD 14.5 per share, potentially raising up to HKD 5.04 billion. Each lot consists of 200 shares, with an entry fee of approximately HKD 2,929.2. China Resources Beverage is expected to list on October 23rd, with UBS, BOC International, CITIC Securities, and Bank of America Securities as joint sponsors.

According to a report by Frost & Sullivan, China Resources Beverage is one of the pioneering companies in China specializing in the production of packaged drinking water. It has evolved into the second-largest packaged drinking water company in China and the leading drinking pure water company in China (based on retail sales in 2023). The company's "Yibao" brand of drinking pure water products achieved retail sales of RMB 39.5 billion in 2023, solidifying its position as the leading brand in China's drinking pure water market.

Data indicates that China Resources Beverage primarily possesses a product portfolio encompassing 13 brands, including "Yibao," "Zhiben Qingrun," "Honey Water Series," "Holiday Series," and "Zowei Tea Affairs," comprising a total of 59 SKUs. As per Frost & Sullivan, in 2023, the company's packaged drinking water products commanded the highest market share in the packaged drinking water market of six provinces in China (namely Guangdong, Hunan, Sichuan, Hainan, Guangxi, and Hubei). In 2023, the packaged drinking water market in these six provinces accounted for approximately 30% of the total market size of China's packaged drinking water market.

Financially, in fiscal years 2021, 2022, and 2023, China Resources Beverage achieved revenue of approximately RMB 11.34 billion, RMB 12.62 billion, and RMB 13.51 billion, respectively. Net profit for the year was approximately RMB 8.58 billion, RMB 9.89 billion, and RMB 13.31 billion, respectively.

Approximately 30% of the net proceeds will be allocated towards strategic expansion and capacity optimization, 23% towards accelerating sales channel expansion and enhancing channel efficiency, 23% towards sales and marketing activities, 3% towards bolstering product research and development capabilities, 3% towards digital upgrades, 8% towards potential investment and acquisition opportunities, and 10% as working capital and for general corporate purposes.

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