You better watch out.
You better not cry.
Better not pout.
I’m telling you why.
The Umbrella IPO is coming to town.
Jicheng Umbrella Holdings, China’s top umbrella exporter, has just filed for an initial public offering in Hong Kong, catching the attention of the market at a time when the pro-democracy “umbrella revolution” protests are into their third week in the city.
When the Fujian-based firm planned its IPO, I doubt if anyone would have envisaged that its flagship product would be such a sought-after item in Hong Kong. Otherwise the company wouldn’t be listing political instability as a risk factor.
Interestingly, Jicheng doesn’t have too many connections in Hong Kong. Founded by Huang Wenji and his wife Chen Jieyou in 1996, about two thirds of the mainland firm’s HK$372 million sales last year went to Japan, where it sold polyolefin elastomers (POE) umbrellas, nylon umbrellas and umbrella parts.
Since Hong Kong is not even listed among its top four markets now, it means that Jicheng, which sold 31 million umbrellas last year, could have a potential new big market if it comes up with a yellow color product and caters to the current “revolution” in the city.
Depends on who you ask in Mong Kok, the umbrella can mean anything, from protection to a weapon. Yesterday Leung Che-cheung, a legislator of the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), made headlines as he suggested that the umbrella is an “attack weapon”, and that it has been widely used as such during the Republic of China (1912-1949) era.
Leung noted that Master Wong Fei-hung, a famous Chinese martial arts folk hero, had used an umbrella to fight the bad guys. Now, the protesters in Hong Kong could also use the humble umbrella as a weapon to launch new attacks against law enforcement officials, he suggested.
Police had to use pepper spray and tear gas against umbrella-wielding students on Sept. 28, Leung pointed out. But he ignored the fact that the police officers were armed with batons, unlike the fighters in ancient times.
While the umbrella debate will no doubt continue for some time, Jicheng can meanwhile grasp this opportunity by calling police commissioner Andy Tsang Wai-hung and asking him if he has appetite for a new weapon.
Jokes aside, I would like to end with a serious note of caution. Despite the publicity mileage, I am not convinced that Jicheng is a good company to invest. As any experienced money manager would tell you, there are red flags surrounding Fujian-based enterprises. Companies having very young chief financial officers especially warrant vigilance.
Check out Jicheng’s prospectus:http://bit.ly/1F8wVqK
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