Produce firm Sino Grandness plans HK listing of drinks unit

A Chinese manufacturer of canned fruit and vegetables listed in Singapore plans to take its beverage unit public in Hong Kong, a further sign that surging demand in the world's second-biggest economy is luring companies to raise capital.

Sino Grandness Food Industry Group Ltd chose Hong Kong because the market for fruit-based drinks made by its unit is in China, Chairman Huang Yupeng said. Demand for the products made by Garden Fresh Group Holding Co is growing fast and accounts for 70 percent of revenue, he said on Tuesday.

Rising incomes and urbanization in China, the world's most populous country, have stoked demand for everything from cars to refrigerators and food. The government is shifting the economy away from State investment to a consumption-led model, a move that may further fuel sales. Sino Grandness shares have jumped 79 percent in the past year as gross profit rose.

"The context now is very different," Huang said in Singapore, when asked why the company didn't list the unit in the Southeast Asian city state. "In 2009, when our business was canned vegetables and fruits, we were exporting to Europe. Singapore, as an open, law-based and transparent exchange, was a great help with overseas business. The product's main consumer is now China and demand is growing very fast."

The Singapore exchange has declined in the IPO rankings and had the smallest haul of new share sales among Southeast Asia's four largest stock markets in 2015. Listings this year on Southeast Asia's biggest bourse totaled $34 million, trailing Thailand and Malaysia.

In the past four years, at least two companies－China Animal Healthcare Ltd and Sound Global Ltd－have delisted from Singapore in favor of Hong Kong.