Beijing Sanfo Outdoor Products, which claims to be China's largest specialty retail group in the outdoor sector, had a good start at the Shenzhen Stock Exchange on Dec. 9. The retailer raised about 160.1 million yuan renminbi (22.6m€- 24.7m$) from its long-awaited initial public offering, issuing 17 million new shares that now represent about 25 percent of the equity.

Sanfo shares were offered on the first day of trading for RMB 9.42 and their price has been rising steadily, reaching more than RMB 56 at the time of writing. Heng Zhang, Sanfo's 45-year-old founder and chief executive, remains the company's largest shareholder, although his stake has declined from 38 percent before the IPO to 28 percent.

According to the latest published figures, the company booked sales of RMB 360 million (€50.8m-$55.6m) in 2014, up from RMB 300 million in the prior year. Despite cost cuts, profits have been under pressure from rising costs for locations and staff. Net profit slipped by 10 percent in 2014, ending up with a net margin of 8 percent of sales. Sanfo's sales and profits have gone up this year, Zhang said.

The new funds will chiefly be used to push Sanfo's expansion across the country, notably into second and third-tier cities. Sanfo is planning to open about 37 new stores in 26 cities within the next three years. By the end of 2014, the chain boasted 36 points of sale in 12 cities with a focus on Beijing, where Sanfo is based, and the retailer only opened a couple of small stores this year.

The funds raised through the IPO should also be used for investments in information technology. The share of e-commerce is expected to grow to about 25 percent of the turnover in the medium term. Online sales amounted to about 15 percent of Sanfo's retail turnover in 2014.

Zhang added that some of the new financial resources could be used to acquire Chinese wholesale distributors of foreign outdoor brands. The wholesale business currently makes up only a small part of the company's total revenues, representing Nikwax, Lizard and Julbo.

Zhang has been working on the IPO project for at least six years. China's regulatory authorities had agreed in principle to get Sanfo's IPO in motion last July, after approving a detailed company prospectus, but the listing was delayed because of turmoil in the country's stock markets.

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