[THE INVESTOR] Zhuo Zhongbiao, CEO of Coloray International Investment, the first Chinese company to go public in Korea this year, downplayed the so-called “China risk” while appealing to investors in Korea.

“I know there is hostile sentiment toward Chinese companies after some firms were involved in accounting fraud. But we have decided to be listed in Korea from a long term business perspective,” he told The Investor on July 25. 

Coloray is a holding company that owns 100 percent of Zhejiang Coloray Technology Development, a cosmetics pigment supplier for global beauty companies such as L‘Oréal and Estée Lauder. 

The company aims to raise up to 81.2 billion won (US$72.40 million) from its planned stock debut on the nation’s secondary bourse KOSDAQ next month. The stock price is expected to range between 3,800 won and 5,800 won.

The CEO said the company considered listing in other markets such as Hong Kong and mainland China but decided to go ahead with Korea considering the market’s better understanding of the beauty industry overall.

“Instead of waiting for years to be listed in China, we have decided to go Korea and raise cash for facility investments,” he said, adding that the company was already producing at its full capacity amid soaring demands for cosmetics pigments.

Its revenue and net income last year stood at 38.8 billion won and 11.1 billion won, respectively, up from 28.2 billion won and 191 billion won from the previous year.

Industry watchers predicted a dozen Chinese companies to go public this year but many are delaying their plans as two Chinese companies -- China Ocean Resources and Wanli -- are facing delisting for fabricating disclosures and accounting records.

For instance, Green Source International, a China-based fertilizer manufacturer, sought to be listed in the first half of this year but dropped the plans in June citing the outbreak of avian influenza.

“Green Sources feared devaluation, among others,” an industry source said on condition of anonymity.

In order to build trust from Korean investors, the Coloray CEO pledged to make all-out efforts to protect investors such as paying 15 percent of net profit as dividends and setting up a Korean office by the end of this year.

Coloray is scheduled to begin trading on Aug. 10 after receiving subscriptions on July 31-Aug. 1. Shinhan Securities is the IPO advisor.

By Park Ga-young (gypark@heraldcorp.com)