BRIEF: Three Squirrels’ Hong Kong IPO gets China’s regulatory green light

Snack maker Three Squirrels Inc. (300783.SZ) has been cleared by the Chinese securities regulator to make a Hong Kong IPO, the regulator said last week, clearing a major regulatory hurdle for the listing to proceed.

Three Squirrels plans to sell 81.5 million shares in the IPO, according to the China Securities Regulatory Commission (CSRC), which announced its formal registration of the plan on its website on Sept. 30, the day before China’s weeklong National Day holiday. The company filed its preliminary IPO prospectus to the Hong Kong Stock Exchange on May 9, meaning it will need to file an updated prospectus if it doesn’t complete the listing by Nov. 9.

Three Squirrels’ revenue rose about 8% in the first half of this year to 5.48 billion yuan ($770 million) from 5.07 billion yuan a year earlier, according to its second-quarter earnings report filed to the Shenzhen Stock Exchange, where it is already listed. But its profit tumbled 52% to 138 million yuan from 290 million yuan over that time.

Three Squirrels is one of a growing number of Chinese companies listed on the country’s domestic A-share markets in Shenzhen and Shanghai that have recently applied to make second IPOs in Hong Kong to tap global capital markets and raise their global profiles. The company’s Shenzhen-listed stock is down 35% so far this year.

By Doug Young

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