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China's Camkids prepares for Aim float

Chinese retailer Camkids is launching onto the Alternative Investment Market offering UK investors a chance to tap into the country's burgeoning consumer goods market.
December 19, 2012

Chinese children’s outdoor apparel manufacturer Camkids Group has announced plans to float on London's Aim market in a bid to strengthen its brand, expand production capacity and extend its network of shops across China.

IC TIP: Hold

Dealings are expected to start on 24 December with an anticipated market capitalisation of £65m. Pitched as a western brand to Chinese consumers, Camkids started life as a shoe manufacturer in 1994 before starting its own product line in 2001. It now designs, manufactures and sells outdoor apparel, footwear and equipment for Chinese children through 1,000 retail outlets across the country.

The company has an 11.1 per cent market share of total sales in its sector, ranking second after Nike. In the year to December 2011, it generated revenues of RMB742m (£74m), pre-tax profits of RMB213.7m (£21.1m), with a gross margin of 42.9 per cent.

And while China's one-child policy means the number of children is declining, management claims parents are willing to spend more money on their only offspring, so expenditure on children's apparel and footwear is actually estimated to double by 2016.

Matt Butlin, research analyst at Allenby Capital, expects 20 per cent top-line growth over the next two years.