China Star Food ends 26% above placement price

Singapore

CHINA Star Food, which started its Catalist trading on Wednesday following a reverse takeover and a compliance placement to lift its public float, ended 26 per cent above the placement price of 23 Singapore cents.

It opened trading at 23 cents to match the placement price, then rose to as high as 31.5 cents before closing the day at 29 cents. Some 24.6 million shares changed hands, putting it among the top 10 most actively traded.

The Fujian-based food products company specialising in the production and sale of sweet-potato snacks had completed a S$168 million reverse takeover of cash company Brooke Asia in September last year and recently completed its compliance placement of 25.25 million shares.

"China Star Food Group Limited has reached another major milestone with its listing on the SGX Catalist. We believe the listing will raise the profile of the company as one of the leading manufacturers of healthy food snacks in the PRC," said group CEO Liang Chengwang.

SGX head of equity capital market and head of capital market development Mohamed Nasser Ismail pointed out that this listing comes with detachable warrants, giving shareholders who participated in the listing an option to increase their shareholding in the company within two years of its listing. (The warrants ended trading at 3.2 cents apiece on Wednesday.)

"Given the size of China's consumer market coupled with the company's focus on food quality and safety, China Star Food will ride on the market's growth prospects, underpinned by an increasingly affluent middle class that demand healthier snack options," Mr Ismail said. "China Star Food also plans to export its products to key Asian markets such as Japan, and we look forward to partnering the company in its growth vision."

The listing of China Star brings the total number of companies on Catalist to 179, with a combined market capitalisation of S$9 billion.

Money raised from the S$5.8 million share placement will be used for general working capital and the expansion of working capacity.

Its snacks are sold mainly to distributors and wholesalers, who distribute via e-commerce portals and supermarkets, petrol kiosks, convenience stores and specialty stores throughout China.