China Sports plans S$74.7 mln IPO

China Sports International, a manufacturer and distributor of sports shoes and apparel, said it plans to raise S$74.7 million through its IPO on the Singapore Exchange.

China Sports, which is reported to have a market value of S$269.5 million, will offer 100 million new shares, 29.7% of its enlarged capital, at S$0.80 per share. This is the top end of its S$0.70 – S$0.80 indicative range. Three million of its 100 million shares will be issued through public offer, while the remaining 97 million will be issued through private placement.

With its net proceeds, a portion of the S$74.7 million will be used to boost production capacity, advertise and promote the brand, as well as extend its distribution network and sales avenue. A portion of the net proceeds will also be used to fund product development and provide working capital.

At its IPO price, the firm will trade at 18.3 times its 2006 earnings, and earn 4.34 cents per share.

China Sports has reported a 36% increase in its net profit in 2006, which was about RMB 73.6 million of RMB 690 million. Revenue had jumped 44.2% to RMB 690 million, compared with sales of RMB 478.6 million in 2005.

Stirling Coleman is the manager, underwriter and placement agent for the IPO.

The IPO closes on Jul. 16. Trading is expected to begin Jul. 18.

China Sports is a manufacturer and distributor of sports shoes and other apparel under its "Yeli" brand, and the firm also manufactures for Kappa and Fila. China Sports positions itself as a low-end brand, targeting consumers between 12 to 30 years old.