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Kunda digs for cash on Hong Kong bourse
Posted on Thursday, 26 March 2020 07:42
Cayman Islands-incorporated, China-based marble explorer and processor Kunda Mining Holdings is trying its hand at an initial public offering (IPO) in Hong Kong.
The company has submitted paperwork with the bourse that shows Redsolar is acting as sole sponsor.
Kunda is the second-largest player in terms of resource in China’s highly-fragmented marble industry, the majority of which are small and medium-sized companies with low productivity levels.
Entities with larger operation scales, however, have begun to enter the mid-range and high-end markets after incorporating advanced technologies and upgrading processing equipment into output lines.
Participants in the marble industry in China compete in the areas of resource, product price, research and development capability, target segment, value chain coverage and integration.
According to a Frost & Sullivan report cited in the prospectus, the most popular items are yellow, white and grey marble, which accounted for a market share of 37.5 per cent, 20.3 per cent and 13.3 per cent, respectively, in 2019.
Yellow marble is widely used for public building decoration as the colour and pattern can be widely accepted by customers and it can create a warm and welcoming atmosphere.
Grey is popular among young customers due to its fashionable and high-end texture, and since it is expected to become more fashion and high-end in the future, this product is likely to be in a rapid demand.
Kunda owns the Dongjia mine, located about 175.00 km to the south of Guiyang City, the capital of Guizhou Province.
The aggregate capital costs for the development of the project, according to the current development plan, is about CNY 279.50 million (USD 39.39 million), of which an aggregate amount of CNY 135.0 million had already been incurred by 31st December 2019.
It noted the remaining CNY 144.50 million is expected to be financed by proceeds from the IPO and cash generated from operating activities.
Kunda had gearing of 895.3 per cent, as at 31st December 2018.
Zephyr, the M&A database published by Bureau van Dijk, shows 300 IPOs have been announced in 2020 to date.
The largest is PPD completing the sale of a 17.7 per cent stake on Nasdaq to raise USD 1.62 billion.
© Zephus Ltd