(Yicai) Sept. 26 -- China Resource Beverage Holdings, which owns the C’estbon mineral water brand, has passed the Hong Kong Stock Exchange’s hearing for an initial public offering, bringing it a step closer to becoming the second Chinese water bottler to list in the city.

The IPO documents released by the Hong Kong exchange yesterday did not indicate how much the soft drinks maker aims to raise through the IPO. It could be as much as USD1 billion, Reuters reported on Sept. 23, making it Hong Kong’s biggest IPO this year.

Hong Kong’s largest floatation in more than three years was last week, when Chinese electrical appliance giant Midea Group banked about USD4 billion in a secondary listing.

By sales, Shenzhen-based CRB was China's second-biggest bottled water company and largest purified water producer last year, according to China Insights Consultancy.

The IPO signals the firm’s ambition to expand its market share, potentially intensifying competition with market leader Hangzhou-based Nongfu Spring, which floated in Hong Kong in September 2020, raising about USD1.1 billion.

The proceeds of CRB’s listing will be used for capacity optimization, sales channel expansion, digital upgrading, investments, mergers and acquisitions, and other activities, it said. BofA Securities, Bank of China International, Citic Securities, and UBS are the IPO’s joint sponsors.

For the first four months of this year, the firm reported a net profit of CNY461 million (USD65.7 million) on CNY4.2 billion (USD598.3 million) of revenue, almost 90 percent of which came from the sale of packaged drinking water. It had 13 self-owned plants with 61 production lines and 31 partners running 70 production lines in China as of April 30.

CRB is controlled by China Resources Holdings, a state-owned conglomerate based in Hong Kong. Eight of its affiliates went public in Hong Kong, while nine others listed in the Chinese mainland.

Editor: Futura Costaglione