Rainbow Brothers Holdings, which aims to raise up to HK$75 million in a Hong Kong initial public offering, plans to distribute 50 per cent of its profit as dividend to lure investors, market sources said.
The Hong Kong firm, a specialist in providing consumer products with a retail price of US$1 each, will sell 50 million new shares at between HK$1.12 and HK$1.50 each or six to eight times historical earnings.
Retail subscription will open from next Tuesday to Friday, sources said. Trading is scheduled to start on November 19. Asian Capital is the sponsor of the deal.
Rainbow, which makes goods for parties and festivals, provides more than 2,000 types of products for dollar store chains in the United States, Europe and Asia.
The company posted a net profit of HK$37 million for the year to March, up 61 per cent from HK$23 million a year earlier.
Turnover grew 50 per cent to HK$315 million, according to its presentation materials distributed to institutional investors.
For the first four months to July, profit rose 3 per cent to HK$13.2 million on turnover of HK$132 million.
