Honma Golf goes for Hong Kong listing

Looking to raise US$162 million (Shared from GolfPunk)

Honma Golf, the premium Japanese golfing equipment company, is set to relist on the Hong Kong Stock Exchange on Thursday. The move is part of a plan for expansion in China and elsewhere.

Honma Golf is looking to raise US$162 million by listing 133.99 million shares. The initial public offering price is set at HK$10; the tentative price range had been HK$8.46 to HK$10.98. A Honma Golf representative said Hong Kong is the ideal place to go public.

In 1995 Honma Golf listed on Japan’s old Jasdaq market. Ten years later, it filed for bankruptcy protection under the civil rehabilitation law due to poor earnings amid stiff competition.

Ownership shifted from the founding family to an investment company affiliated with Nikko Cordial Securities. In 2010, Chinese fund Merlion Holdings acquired a stake.

Honma Golf had already expanded overseas before it filed for bankruptcy. The company established subsidiaries in Singapore, Hong Kong and Taiwan in 1996. Japan accounted for 53% of the company’s sales for the fiscal year ended March 2016, while South Korea made up 13% and greater China, including Hong Kong and Macau, contributed 19%.

A company representative said funds raised in the IPO will go toward acquisitions and other costs associated with boosting its share of Western markets.

Honma Golf’s Chinese operations also have strong growth potential, though there is concern that President Xi Jinping’s anti-graft campaign could hurt earnings.

In recent years, the Chinese government has been cracking down on officials who golf at the public’s expense, as well as the use of golf memberships as bribes.