Liquid maker Dukang issues TDRs on TWSE

Updated: 2011-03-10 13:12
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TAIPEI - Chinese mainland distillery, Dukang Distillers Holdings Limited, began issuing 130 million units of Taiwan depository receipts (TDRs) on the Taiwan Stock Exchange (TWSE) at NT$18.65 (63 cents) per unit on Wednesday.

The offering makes Dukang the first mainland alcoholic beverage company listed on the TWSE and the 25th TDR issuer after Taiwan's security authorities loosened the policy of listing.

Currently, regulations stipulate that mainland companies can only enter the Taiwan security market by issuing TDRs.

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Dukang hopes to promote its brand with Taiwan's consumer industry and capital market by issuing the TDRs, although Chinese mainland distillers can not currently sell alcoholic beverages to Taiwan.

After the mainland and Taiwan signed the Economic Cooperation Framework Agreement (ECFA), several mainland companies have issued TDRs. Dukang is the first beverage maker to do so.

With a 2,000 year history, distilled liquor has been a mainstay in the Chinese mainland alcoholic beverage market. Liquor sales account for 70 percent to 90 percent of the total beverage sales each year.

Hanna Hsian, an analyst with Taiwan's Polaris Securities, said that TDRs issued by mainland companies have been favored by Taiwan investors as almost all of them had been raised above issuing prices.

"With China's 12th five-year national development program seeking to increase domestic consumption, it has been expected that consumer market will continue to grow in the next decade," Hsian said.