MANILA—The country’s leading airconditioning and refrigeration appliance manufacturer, Concepcion Industrial Corp. (CIC), debuted on the local stock exchange and sealed a deal to locally distribute the products of Chinese manufacturing powerhouse GD Midea Holdings on Wednesday.
About P1.95 billion worth of CIC shares were sold during the company’s initial public offering, which placed out 74.965 million shares to new investors at P26 per share. CIC shares, however, fell by 3.27 percent to P25.15 per share in morning trade after its listing debut.
Raul Joseph Concepcion, CIC chair and chief executive officer, said during Wednesday’s listing ceremonies: “Fifty years of operational excellence, product innovation and enduring partnerships have prepared CIC for the inevitable shift from being a family-owned corporation into a public company.”
“The IPO ensures a sustainable platform for CIC as it expands its product offerings and integrated business solutions,” he added.
CIC, which has been growing at a compounded annual growth rate of 13 percent in the last three years, is upbeat about its growth trajectory in the years ahead. Concepcion noted that nine out of 10 consumers in the country don’t have airconditioners while six out of 10 don’t have refrigerators, giving the company a lot of room for growth even if it were just to concentrate on the Philippine market.
At the same time, Concepcion said, CIC would benefit from the trend of consumers looking to replace existing appliances with more energy-efficient models. He noted that the Filipino middle class has been growing, thereby benefiting CIC’s business.
Furthermore, he said, the opening of more casinos, restaurants and shopping malls in the country would spur demand for CIC products. CIC has the largest market share of 36 percent for airconditioning in the Philippines and 26 percent for refrigerators. In terms of business mix, airconditioning accounts for the lion’s share of its business.
The joint venture with China’s Midea, the largest appliance company in the world, would allow CIC to expand its distribution business beyond airconditioning and refrigeration. Concepcion said this would allow CIC to offer other consumer appliances like conventional ovens, microwave ovens and cooking ranges, which were not in its portfolio until now.
In a separate disclosure, CIC said it had signed a shareholders agreement with Midea Electric Trading (Singapore) Co. Pte. The agreement will be effective “upon the fulfillment of certain conditions precedent by both parties,” the disclosure said.
The joint venture is a distribution firm which is 52 percent owned by CIC and its holding company and 48 percent by Midea.