Baby-care products provider Biostime plans HK$1.8b IPO

Biostime International Holdings, a Guangzhou-based paediatric nutrition and baby-care products provider, plans to raise up to HK$1.8 billion in an initial public offering on the Hong Kong stock exchange.

Biostime plans to issue 150 million shares at an offer price of between HK$10 and HK$12 each. Pricing is planned for December 9 and the trading debut is scheduled for December 17. The IPO will include a 15 per cent over-allotment option.

Luo Fei, chairman and chief executive of Biostime, said the company would continue to strengthen its brand as a leader in the premium baby food and care market. Its probiotic supplement for children dominates the market on the mainland, with a market share of 85.4 per cent, according to Euromonitor International, a provider of business intelligence.

Its milk powder holds a 13 per cent market share in the supreme-tier infant formula market. The cheapest of Biostime's four milk products sells at 218 yuan (HK$254) per 900 grams, with the cost of a month's supply for a baby at between 800 and 900 yuan. The most expensive costs more than 400 yuan per 900 grams.

The company launched BMcare this year, a new brand of baby-care products. BMcare consists only of diapers, but other products including shampoo, bath gel and baby oil will be added next year.

Luo said that HK$540 million, or 35 per cent of the net proceeds of the offer, would be earmarked for enhancing and reinforcing the company's brand recognition and image, while HK$310 million, or 20 per cent, will be used to expand its business by co-operating with upstream suppliers. Expansion of its sales distribution networks and research and development will each absorb HK$230 million, or 15 per cent of the funds.