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Foreign Firm to be Listed on KRX

Posted December. 29, 2006 07:20,   


Huafeng Textile International Group, a China-based textile company, will be the first foreign company to be listed in the Korean stock market.

If the listing is successful, a slew of foreign businesses, mainly Chinese, are expected to follow suit.

The Korea Exchange (KRX) said yesterday that Huafeng Textile, which is listed in the Hong Kong Stock Exchange, submitted its application to be listed on the KRX.

After successfully completing remaining procedures, including a screening by the KRX, approval of its registration statement by Korean securities authorities and IPO, it will be officially listed on the KRX in March.

Founded in 1988, Huafeng Textile is a textile and fabric producer which posted 80 billion won in sales and 10 billion won in net profit (by estimation.) After designating Daewoo Securities as its financial advisor for being listed on the KRX in May this year, the Chinese company has taken necessary steps.

The largest shareholder of the company is its Chairman Cai Zhenrong who owns a 48.5 percent stake. He visited the KRX that day to submit its application.

The KRX said, “With numerous foreign companies listed on them, the stock exchanges in New York and London are serving as a global financial hub,” adding, “The Chinese company’s move is meaningful in that it is a result of the activities to attract foreign companies to the KRX which we have been pushing ahead with as a core task to globalize Korea’s stock market.”

Indeed, the KRX has held 15 seminar sessions to promote listing on it in major Chinese cities since last year. It also signed an MOU for listing of Vietnam firms on the Korean stock market.

Lee Yeong-tak, chairman and the CEO of the KRX, said, “Currently, a total of 12 foreign companies (11 from China, one from the U.S.) appointed Korean securities companies as their financial advisors and are preparing for their listing on the Korean stock market.”

He went on to say, “We are contacting financial authorities of Vietnam, Malaysia, Kazakhstan and Cambodia to attract major companies in those countries, beyond Chinese businesses.”

The securities industry highly regards the recent development in that it heralds the beginning of foreign businesses’ listing on the Korean market. But it also points out that, considering the first one which bids for the KRX is a textile company from the declining industry, it has to wait and see whether the company would be received well by the market.

Furthermore, some argue that it is too soon to expect the Korean market will be inundated with foreign firms’ bids to be listed because large companies listed in the Shanghai stock market has to get approval from Chinese financial supervisor authorities in advance to make any move.