Chinese foot massage firm finds a listing niche on Australian bourse

Traditional Chinese medicine is set to spread its wings to overseas bourses, with a Chinese foot massage company looking to list its shares on the Sydney-based Australian Securities Exchange.

According to an ASX announcement, Traditional Therapy Clinics Ltd which owns the Hong Kong-registered China Fuqiao Healthcare Co Ltd, will be listed on the Australian bourse on Monday. China Fuqiao Healthcare, in turn, holds a 100 percent stake in Fuqiao (Chongqing) Holdings Co Ltd, which is the fastest-growing foot therapy massage brand in China.

TTC plans to raise A$15 million ($10.7 million) through an initial public offering of 30 million shares priced at A$0.5 each. The proceeds will be used to "fund expansion plans, brand promotion, expansion of franchisee network, and enhancing corporate governance standards", the company said in a statement.

Andrew Sneddon, a former partner with PricewaterhouseCoopers, a global consultancy firm, will be the new chairman of TTC, rather than the founder Hu Zhirong. Sneddon has extensive experience in management and investment-related activities.

Following the public issue, Hwazon Investment Ltd will become the largest shareholder of TTC. The actual controller of Hwazon is Hu Zhirong, the founder and president of TTC, who indirectly holds 62.04 percent of Hwazon. After the float, Hu's personal wealth will rise to 300 million yuan.

Starting its operations in Southwest China's Chongqing with foot therapy clinics in 1998, TTC had about 299 franchisees and 11 fully owned clinics in China as of April 30. It has been operating under the brand name Fuqiao, a trademark that was approved by the State Administration Trademark Office in 2002.

The company has recorded a compound average annual growth rate of 69 percent in the past four years. According to company data, its sales revenue surged to A$30.86 million in 2014 from A$8.82 million in 2012. It is expected that the company's sales revenue will reach A$41.66 million this year, with net profit coming in at A$15.85 million.

Australia was not TTC's first choice, however. China Fuqiao Healthcare was registered in Hong Kong in 2011. A year later, Hu of TTC said that the company was carrying out plans to go public in Hong Kong. As to the changed destination, TTC would not disclose anything for the time being, saying that all the related information will be released once the company is successfully listed.

Australia has become one of the most popular overseas markets for Chinese companies in recent years. In Chongqing alone, there are two companies that have gone public in Australia since 2003.

According to Gao Jianzhi, chairman of Beijing-based Eagle Investment Group Ltd, Australia will gain increasing attention from Chinese companies with listing plans, especially after the free trade agreement between China and Australia. Companies specializing in alternative energy, services, consumer products, high technology and biotechnology could consider Australia as a listing destination.

shijing@chinadaily.com.cn