Mirae Asset Daewoo drops Chinese firm’s IPO
[THE INVESTOR] Mirae Asset Daewoo has dropped its plans for an initial public offering of a Chinese company amid negative investor sentiments, industry sources said on Aug. 7.
Mirae Asset Daewoo was the lead underwriter for Green Paper Material Holdings, a Chinese corrugating medium maker. The IPO was the first attempt in seven years by the Korean financial institution to resume listing of Chinese firms, a business which looked lucrative two years ago.
“Although Green Paper Material Holdings has a sound growth record backed by the Chinese government’s green policy, we concluded that it would be very difficult to get a fair value for the company in the midst of tepid investor sentiment following delisting of other Chinese companies,” an official at Mirae Asset Daewoo said.
IPOs of Chinese companies in Korea gained momentum in 2016 when six firms were listed in Korea after a five-year hiatus. Although as many as 24 Chinese companies were expected to go public in Korea last year, their attempts to get listed in Asia’s fourth-largest economy were tempered by renewed fears over Chinese companies accused of fabricating disclosures and accounting fraud. This year, Wanli International Holdings and China Haoran Recycling were kicked out from the local stock markets, joining nine other Chinese companies.
The market prospects looks gloomy for Chinese companies hoping to get listed in Korea. Out of those 24 companies which were considering a listing last year, only Coloray International Investment, a cosmetics pigment supplier, went through with the process. The country’s stock operator is currently reviewing Wing Yip Food, a sausage maker, for what could be the first and the only Chinese company to be listed in Korea this year.
By Park Ga-young (firstname.lastname@example.org)