Metersbonwe plans to launch "consumption concept" in the end of next year

Although the lack of similar giants of ICBC (1398.HK) new shares, this year's Hong Kong stock market is still very lively. After many mainland consumer stocks such as Belle International (1880.HK) and ANTA Sports Products (2020.HK) successfully landed on the Hong Kong Stock Exchange, it was reported yesterday that Bosideng, a down apparel manufacturer and seller, and Mates, a casual wear manufacturer Bonwe plans to go to Hong Kong for listing this year and next year. Mainland companies that already occupy more than half of Hong Kong's new stock market seem to be going through the "consumption concept."

According to sources, Metersbonwe plans to go to Hong Kong for listing early next year and raise 400 million U.S. dollars. UBS will serve as the IPO underwriter. The company's website introduced that its first store was opened in Wenzhou on April 22, 1995 and currently has nearly 1,800 directly-owned franchise stores nationwide. In 2006, sales exceeded 4 billion yuan. Zhou Chengjian, President of Metersbonwe, who is engaged in garment processing to excavate the first barrel of gold in Wenzhou, ranks 85th in the Hurun Rich List in 2006 and has a net worth of 3.3 billion yuan.

At the beginning of the IPO plan for Metersbonwe, another garment manufacturer is also preparing for listing. It is reported that Bosideng plans to raise 300 million to 400 million U.S. dollars this year through IPO. In the first year of listing, Bosideng conducted a series of internal restructurings, the most important of which was the introduction of a strategic investor HSBC. Earlier reports said HSBC’s direct investment company invested 70 million US dollars.

Bosideng is Asia's largest and most technologically advanced down product production base, with total assets of nearly 5 billion yuan. Since 1995, the sales volume for the 11th consecutive year has been the first in the country, accounting for 45% of the market share of the inland and down apparel.

According to industry insiders, the concept of consumption in the Mainland is still one of the most popular themes in the Hong Kong market. The current stock price of Belle International, which was listed in May, rose 55% over the offer price. The mainland sports shoe brand Anta listed on the first day of July 10, the stock price rose sharply by 42%, and the stock price hit a new high of 8.25 HKD yesterday. The stock price has risen 52.27% over the offer price. With the sharp rise in the stock price, the average price-earnings ratio of mainland consumer stocks has already far exceeded Hong Kong's local consumer stocks.

So why can mainland consumer stocks enjoy a premium? Analysts pointed out that this is because investors hope to benefit from the $800 billion retail market in the Mainland. According to statistics of McKinsey & Company, in the global net retail sales growth from 2003 to 2008, China may contribute 30% of this. In a very fragmented stock market, clothing, shoes and hats stocks can enable investors to seize shopping growth opportunities.

As a representative of the mainland consumer stocks, Li Ning (2331.HK) was credited by Rui Xin yesterday. For the first time, the bank gave Li Ning a “outperform” rating with a target price of HK$23.4. Credit Suisse said that Li Ning has several brands that can attract consumers at different price points. There is no indication that Li Ning’s strong momentum in the past three years has weakened. Li Ning’s compound annual growth rate of sales from 2004 to 2006 was 39%. The compound annual growth rate of net profit was 42%. Credit Suisse expects Li Ning’s strong momentum to continue into 2009.