Nongfu Spring Rival CR Beverage Targets US$640 Million IPO for Expansion and Efficiency

CR Beverage's IPO Plans and Strategic Goals

China Resources Beverage (CR Beverage) is gearing up to raise up to HK$5 billion (US$640 million) through an initial public offering (IPO) in Hong Kong, focusing on enhancing its supply chain efficiency and expansion plans. The packaged water giant is scheduled to offer 347.8 million shares at HK$14.50 each, with potential for increased shares to meet demand.

According to their latest filing with the Hong Kong stock exchange, the company anticipates generating approximately HK$4.72 billion in net proceeds, following underwriting commissions. A significant portion of these funds will be allocated to strategic expansion and improving supply chain processes.

Key Highlights of the IPO

• Joint Sponsors: UBS, BOCI, Citic and Merrill Lynch
• Listing Date: Expected on October 23
• Sales Performance: C’estbon bottled water sales reached 39.5 billion yuan (US$5.5 billion) in 2023
• Use of Proceeds: Funds aimed for R&D, digital upgrades, and marketing

CR Beverage stands as the second-largest player in China’s packaged drinking water segment, operating in a competitive landscape dominated by Nongfu Spring. With the IPO proceeds, the company intends to broaden its sales channels and enhance its overall market presence.

Global IPO Landscape and Performance Insights

The Hong Kong stock exchange saw a notable increase in fundraising activities, with a total of 42 companies raising US$7.14 billion in the first nine months of this year, marking a doubling of totals compared to the previous year. This rise propelled Hong Kong to the fifth position in the global IPO league table by September, a substantial leap from the 13th rank in June, as per London Stock Exchange Group (LSEG) data.

Despite the uptick in local IPOs, the global IPO proceeds have dipped by 22 percent to US$76 billion by September, reflecting the lowest figures for nine months since 2009. One significant IPO contributing to these statistics was the Chinese home appliance maker Midea Group, which successfully raised US$4.6 billion, becoming the largest IPO in Hong Kong in three years.