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IPO Analysis - Something In the Water: Tibet's First Public Listing

12 juillet 2011

525 words
28 June 2011
Corporate Financing Week

In a watershed moment for the region, bottled mineral water company Tibet 5100 Water Resources has become the first firm from the region to tap public investors. The firm soaked up US$177mn from investors following its debut upon the Hong Kong bourse. The appetite for the firm's listing proved to be strong considering it came at a time when the broader IPO market is undergoing something of an uncertain period. Indeed, two mid-market firms (namely local menswear designer China Outfitters and indoor sportswear manufacturer Hosa International) were forced to shelve their proposed listings last week. Furthermore, Shanghai-listed Everbright Bank last week decided to postpone its roadshow presentations to investors in the build-up to its planned IPO. The firm was scheduled to list on the Hong Kong stock exchange as early as July 15. However, Tibet 5100 had more luck. The firm priced its IPO just below the mid-point of the offering range.
Tibet 5100 was eager to cash in on yet another natural resource in demand in China: water. Fu Lin, the Chief Executive Officer (CEO) of Tibet 5100, commented that Chinese demand for premium bottled mineral water has been increasing rapidly, significantly outpacing the mass-market segment. It sees that consumers are thirsty and that there is money to be made. At present, however, it is the long-existing foreign brands, such as Evian and Perrier, which continue to dominate the Chinese bottled water market. But Tibet 5100 is hoping to challenge the status quo and plans to use the money raised in order to help it to grab market share from its foreign competitors. The company mainly targets institutional buyers, such as rail operators, commercial banks, airlines and government organisations. However, with Tibet 5100's share of the overall bottled mineral water market in China at around 2.2%, there is certainly upside potential for the firm to gain ground on its rivals.

Bureau National du CCT 1425, boul. René-Lévesque Ouest, 3e étage, Montréal (Québec) H3G 1T7 Canada
T: (514) 487-0665   ctcoffice@tibet.ca
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