Active Group begins HKSE Main Board IPO

The group targets to raise HK$549mn from 300mn shares ranging from HK$1.20 to HK$1.83 per share.

Active Group Holdings Limited (“Active Group” or the “Group”), one of the leading enterprises and brand operators of men’s casual footwear in the PRC targeting middle to upper-middle end consumers, on Thursday announced the details of its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited (“HKSE”).

Of the 300,000,000 shares set for Global Offering (subject to an Over-allotment Option), 90% will be offered internationally and the remaining 10% offered to the Hong Kong public (“Hong Kong Public Offer”). The indicative offer price range is between HK$1.20 and HK$1.83 per share. Assuming the Over-allotment Option is not exercised, the total issue size is estimated at between approximately HK$360 million and HK$549 million.

The Hong Kong Public Offer will begin on 16 September 2011 (Friday) and end at noon on 21September 2011 (Wednesday). The final offer price and allotment results will be announced on 27 September 2011 (Tuesday). Dealing of Active Group’s shares will commence on the Main Board of HKSE on 28 September 2011 (Wednesday) under the stock code 1096. Shares will be traded in board lots of 2,000 shares.

Guotai Junan Capital Limited is acting as the Sole Sponsor, while Guotai Junan Securities (Hong Kong) Limited is acting as the Sole Global Coordinator, Bookrunner and Lead Manager of the proposed listing of Active Group.

Ms. Cai Xiuman, Chairman of Active Group said, “Over the years, we have developed an efficient distribution and management system that can be easily employed in the PRC as the Group expands.We manage five brands offering a wide range of casual footwear to various segments of the middle to upper-middle end consumers and this diverse brand portfolio represents a broad revenue platform for the Group. Leveraging our proven performance and growing retail sales network operated and maintained by our customers, we believe that the proposed listing in Hong Kong can help support our growth and enhance returns to our shareholders.”

To drive future growth, apart from expanding its existing distribution network through its customers’ retail sales network to third and fourth-tier cities in the PRC, the Group also plans to open 25 self-owned and operated flagship stores by the end of 2013, in prime locations in major and fast growing cities such as Fujian, Beijing, Shanghai, Jiangsu, Zhejiang, Sichuan and Guangdong. The flagship stores are expected to raise awareness of the Group’s branded products and allow the management to closely monitor end consumers’ preferences.

The Group will also upgrade all existing production lines to boost annual production capacity by approximately 14.4% by the end of 2011. In addition, the Group will establish a new production facility in Jiangsu Province, which is expected to commence operation in 2012, producing approximately three million pairs of casual footwear. Total capacity will exceed 7.55 million pairs of footwear, thus helping support future sales network growth. Given the effectiveness of its growth strategies, consolidated profit of the Group for the year ending 31 December 2011 is forecasted to be not less than RMB111.5 million, according to an Active Group report.

Mr. Zhang Wenbin, Chief Executive Officer of Active Group concluded, “To capture huge opportunities arising from booming demand for men’s casual footwear, further development of Active Group is planned across a number of fronts. Apart from expanding the retail sales network for our branded products, we will continue to enhance our design, research and development capabilities in order to offer more high quality new products. With such initiatives in the pipeline, Active Group is set to maintain growth momentum and strengthen its position as a leading men’s casual footwear brand operator in the PRC targeting middle to upper-middle-end consumers.”