Top Chinese motorcycle maker Lifan Group is in talks with strategic investors and is considering an overseas IPO to raise capital to fulfil its automotive ambitions, its founder told Reuters on Saturday.
Lifan rolled out its first sedan in January and targets output of 50,000 cars by 2007, Yin Mingshan said in Beijing, flipping open a new brochure to show off his Lifan 520 sedan.
Having strategic investors on board would help increase the proceeds of an eventual initial public offering overseas, Yin said, adding he was in talks with a US and a European investment bank, neither of whom he would identify.
But Yin, who in 13 years turned Lifan to a company with annual sales of 7.32 billion yuan, is in no hurry to list.
"Listing is like getting married. You don't want to do it until you are mature and can command a better value, just as a young boy won't get as good a bride as a man who has established himself."
Yin said he admired the example of Hainan Airlines, which successfully wooed George Soros to take a minority stake in its listed arm.
But he ruled out a domestic listing, calling the domestic stock market "unhealthy". China's market was the worst-performing of Asia's major bourses for the second year last year.
Cartoons of the lanky Yin - who is worth an estimated $150 million - decorate one brochure, while a second opens with a series of cheery sayings exhorting employees to hard work, honesty and innovation. Among them: "One who earns money in China is a winner. One who earns money overseas is a hero."
Lifan finds it a bit easier to be a hero when it starts producing overseas, Yin acknowledged. The company already has a motorcycle factory in Vietnam, in Bulgaria and in Thailand, and plans to add a new country every year for the next decade.
"Once you are exporting more than 30 percent of a factory's output to one place, it's not worth it because of shipping costs. You may as well build one there. Anyway, by the time you are selling that much you've probably generated labour resentment, so investing helps protectionism evaporate." Lifan sold just short of a million motorcycles last year.
Once spurned by China's state planners, private entrepreneurs like Yin are increasingly important to Beijing as employers and as examples of how China Inc can succeed globally. "I don't fear heaven or hell," he said. "I just fear the Communist Party changing the rules."
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