China Sportswear Maker Peak Mulls A-Share IPO in 2022

(Bloomberg) -- Chinese athletic apparel producer Peak Sport Products Co. is planning an initial public offering of A-shares as soon as next year after delisting from Hong Kong’s stock exchange in 2016, according to people familiar with the matter.

The company was most recently valued at 9 billion yuan ($1.4 billion), the people said, asking not to be identified as the matter is private. It’s currently working with an adviser to raise fresh capital before its planned domestic IPO, the people said.

Deliberations on the size and timeline of the fundraising as well as the potential IPO are preliminary and may not lead to any transactions, the people said. A Peak representative declined to comment when contacted by phone.

Peak was delisted from the Hong Kong market in a $311 million take-private deal in November 2016. The following February, the company announced its intention to seek a domestic listing, according to a press release on Peak’s official WeChat account. The firm raised 2.5 billion yuan at the time from institutional investors including Shenzhen-based DGC Private Equity, Everbright Sports Fund, China Minsheng Banking Corp. and Guosen Securities Co., among others.

Based in China’s southeast Fujian province, Peak designs, produces and distributes sportswear and footwear under its eponymous brand. Founder Xu Jingnan started the company in 1988 and established the brand three years later, according to its investor relations website.

Peak has sneaker endorsement deals with NBA basketball stars including the Los Angeles Clippers’ Lou Williams and the Golden State Warriors’ Andrew Wiggins.

China’s push to raise sports participation among its population is set to boost the sales and profit growth of sportswear brands, Bloomberg Intelligence senior analyst Catherine Lim wrote in a Sept. 2020 report.

Contributions to China’s gross domestic product by sports industry firms including Peak’s foreign rivals such as Nike Inc. and Adidas AG and Chinese competitors Anta Sports Products Ltd. and Li Ning Co. rose to 1.1% in 2018 from 0.8% three years earlier. The growth is likely due to increased sports-related investments such as infrastructure fueled by higher tax subsidies, the report showed.