HomeKoo, a Chinese customized furniture manufacturer backed by Shenzhen Fortune Capital, has obtained regulatory approval to list on ChiNext, the NASDAQ-style bourse of the Shenzhen Stock Exchange.
No financial details of the listing have been determined but it is said that the public offering is looking to sell a total of not more than 2.7 billion shares, to raise RMB 1.8 billion (about US$261 million).
Established in 2004, the Guangzhou-based furniture company is wholly involved in custom-made furniture production, from designing and providing information technology solutions to product sales, as well as developmental and technical services.
Besides, HomeKoo claims that it has incorporated online design services, virtual reality, and mobile internet technology in its manufacturing process to allow large-scale customisation.
Additionally, the company focuses on customised furniture as to meet the demands of the urban consumers, especially Chinese city dwellers who live in small apartments and requires customised furniture to allow for better space utilisation at a relatively low cost.
HomeKoo markets its products via franchised brick-and-mortar stores across the country and an online e-commerce platform HomeKoo.com. At present, the company has two major furniture brands, which are SPZP and Wayes.
Fortune Capital invested RMB70 million (about US$10.2 million) in HomeKoo back in 2009 to help the company expand. At the time of Fortune Capital’s investment, customized furniture held a 10% stake in the overall furniture market in China, and was growing at 20% annually.
The fund raised from the offering will be mainly used for four major aspects, which includes marketing and networking, establishing a one-stop O2O purchase service, creating an intelligent manufacturing production line, and supporting home product strategy.
The company claims that RMB111 million will be used in the construction of a home appliance factory in Foshan, southern China whereby it will be the dedicated modern logistics center to solve the inadequacy of the company’s existing storage capacity.
The modern logistics center will be a three-dimensional automated warehouse, occupying an area of 10696.47 square meters. The construction period is 18 months, and the logistics storage capacity and product turnover efficiency will be greatly improved after the project is put into production.
By Vivian Foo, Unicorn Media