Jan. 17 (Bloomberg) -- AAB Group Co., a Chinese producer of diapers and sanitary napkins, plans to seek as much as $300 million in an initial public offering in Hong Kong, said two people with knowledge of the matter.
The company, based in Quanzhou city in eastern China’s Fujian province, has filed an application to the Hong Kong stock exchange and aims to sell shares by June, said the people, who asked not to be identified because the information is private.
AAB Group is seeking funding as foreign competitors including Japan’s Unicharm Corp. and Dallas, Texas-based Kimberly-Clark Corp. expand in China. The country’s child-related consumption will grow 22 percent annually over the next five years after the government eased rules limiting most families to a single child, according to Goldman Sachs Group Inc. estimates.
Bank of America Corp., RaffAello Capital Ltd. and UBS AG are working on the IPO, the people said. A Hong Kong-based external spokeswoman for AAB Group declined to comment on the IPO plan.
China’s legislature approved a bill last month to let more couples have a second child, after President Xi Jinping proposed easing population controls to help counter a shrinking workforce. Under the new rules, couples will be allowed to have two children if either parent is an only child.
Hengan International Group Co., another Fujian-based diaper maker, plans to increase its production capacity and introduce premium goods, Chief Executive Officer Hui Lin Chit said in a Jan. 15 interview. The company will raise diaper-making capacity by 20 percent and start selling Q-Mo, a more expensive range of the products, in the second half of the year, Hui said.
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