Ligao Food launches IPO, intended to be used for production base construction

Recently, the CSRC disclosed the prospectus of Ligao Foods Co., Ltd. (hereinafter referred to as "Ligao Foods"). The company plans to issue no more than 42.34 million new shares to be listed on the GEM, accounting for not less than 25% of the company's total share capital after the issue. After the issuance, the total share capital does not exceed 169 million shares. The fundraising is intended to be used for production base construction, R & D center construction, information upgrade and supplementary working capital.

According to public information, Ligao Foods was formerly known as Guangdong Ligao Foods Co., Ltd., which was established in May 2000. In October 2017, the company changed its overall establishment to establish Ligao Foods Co., Ltd., which is mainly engaged in the research and development of baked food raw materials and frozen baked foods. Production and sales, products include cream, fruit products, sauces, chocolate and other baked food raw materials and frozen baked semi-finished products and finished products, in addition to producing some snack foods.

According to the prospectus, Ligao Foods ’operating income in the past three years was 956 million yuan, 1.313 billion yuan, and 1.584 billion yuan, respectively, and the compound annual growth rate of revenue was 28.68%; net profit was 43.987 million yuan, 52.308 million yuan, and 181 million yuan; comprehensive gross profit margins were 35.14%, 37.58%, and 41.27%.

In terms of sales model, Ligao Foods currently focuses on distribution, supplemented by direct sales. The company's distribution revenue has accounted for more than 83% for three consecutive years, and the number of distributors has exceeded 1,700.