SHANGHAI - China's top poker maker has received a go-ahead from the securities regulator for its application for an initial public offering (IPO) on the smaller enterprise board, but the approval has triggered disputes among Chinese Internet users.
It will be the first poker company to go public in China.
According to the prospectus of Yaoji Poker based in Shanghai, the poker maker plans to raise 362 million yuan ($55.7 million) by issuing 23.5 million shares.
The money is expected to be used to build a manufacturing base with a designed annual production capacity of 600 million sets of poker. The project will bring the company's total annual output to 1.3 billion sets. In other words, roughly one set of poker for each person in China annually.
However, some people say that as a traditional manufacturer, Yaoji Poker involves low technological content. They believe that this is in sharp contrast with those already listed on the stock market for smaller enterprises, which usually are engaged in high-tech business.
An Internet user whose online name is Zhongzhengying sees the approval of Yaoji Poker's IPO as "ridiculous", since the government has made policies to foster high-tech enterprises, environment-friendly companies and businesses that are related to people's livelihood or provide a large number of jobs.
Professor Dong Dengxin, head of a research institute of finance under the Wuhan University of Science and Technology based in Wuhan, capital of central China's Hubei province, says priority should be given to companies with high-tech content and high added value.
According to Gui Haoming, chief analyst with Shenyin-Wanguo, a leading brokerage company based in Shanghai, Yaoji Poker conforms to related rules over the smaller enterprises market.
"The growth enterprise market, which targets startups, has requirements for technological content of listed companies. But as a matter of fact, the smaller enterprise market does not have such criteria. For instance, Qiaqia Food, which is listed on the smaller enterprise board, is a traditional foodstuff company," Gui told Xinhua on Thursday.
Other Internet users suspect that a stronger poker company might help spur underground gambling. They also joke that now that a poker maker is allowed to go public, will a mah-jongg maker be next?
Gu Xiaoming, a professor with the Shanghai-based Fudan University, said Thursday, "As a sort of recreational approach, poker is not necessarily related directly to gambling. Actually, a company engaged in manufacturing of mah-jongg, which is a popular traditional Chinese recreational game, can be listed if it is in conformity with related rules and regulations."
Still other Internet users say traditional poker is vulnerable to risks of being replaced by online games.
In fact, Yaoji Poker bases its IPO plan partly on an industry report made by the Chinese Stationery & Sporting Goods Association.
The report says that approximately 3.8 billion sets of poker were sold in China in 2009, up from 1.6 billion sets in 2004. In this sense, China is the largest poker production and consuming country in the world. The report also predicts that the country's annual poker sales will reach 7 billion sets in 2015.
According to its prospectus, Yaoji Poker produced 695 million sets of poker and sold 669 million sets in 2010, with a sales-production ratio of around 96 percent.
Gui Haoming told Xinhua, "Yaoji Poker's IPO plan conforms to related laws and regulations, albeit it is not necessarily reasonable."
"Given the current tight monetary policy in China, to direct capital into Yaoji Poker instead of an emerging industry with more rosy development prospects is not the best choice for resource distribution," he commented.