Wilmar’s 99.99%-owned subsidiary Yihai Kerry Arawana Holdings (YKA) has determined the issue price for its China IPO at RMB25.70 ($5.16) per YKA share.
The price was determined jointly with the sponsor and joint lead underwriter of the proposed listing China Securities, as well as China International Capital Co, the other joint lead underwriter of the proposed listing.
The price translates to a price-to-earnings multiple of 31.12x based on YKA’s financial year 2019 recurring net profit and enlarged post-IPO share capital.
According to a filing on September 24, the average price-to-earnings multiple of other listed companies in the same industry as YKA – such as agricultural and food processing industry group C13 – for the immediate preceding month was 41.86x.
Wilmar says the issue price was based on investor demand and took into consideration the industry that YKA is engaged in, the comparable valuations of other listed companies in the same industry, the YKA group’s fund raising requirements and the joint lead underwriters’ underwriting risk.
Through its IPO, YKA expects to raise an amount of some RMB13.9 billion ($2.79 billion) based on its issue price and the total number of new shares to be issued for the proposed listing.
Strategic investors, including state-owned funds, sovereign wealth funds, and insurance companies such as GIC Pte Ltd., People’s Daily Media and Advertising Company, China Oil Asset Management, and China Life Insurance, have been allocated 30% of the IPO shares.
The shares allotted will be subject to a one-year moratorium on transfer starting from the first trading date.
The proposed listing is slated to take place by mid October 2020.
Shares in Wilmar closed flat at $4.38 on September 23.
