Lowe’s Supplier May Give Rise To China’s Latest Billionaire Through Chervon IPO

The launch of an IPO in Hong Kong by a China manufacturer of power tools this week may mint the country’s newest billionaire.

Chervon Holdings is offering 71.9 million shares at a price of up to HK$43.60 per share, raising as much as HK$3.1 billion, or $398 million.

Chairman Pan Longquan, 58, holds 479 million shares, worth the equivalent of $2.68 billion at the maximum expected offering price.

Chervon sells power tools such as saws and drills, as well as outdoor power equipment such as riding mowers and snow blowers. Customers of the Nanjing-headquartered company include Lowe’s and Kingfisher. Revenue in the six months to June increased to $868 million from $514 million a year earlier. Net profit more than quadrupled to $110 million from $25 million year-on-year. Chervon-owned brands include Devon, Skill and Flex.

Cornerstone investors in Chervon’s IPO include an investment company owned by Chinese billionaire Liu Jincheng, the chairman of lithium battery supplier EVE Energy, and his wife Luo Jinhong. Liu ranked No. 46 on the Forbes China Rich List with a fortune worth $11 billion. Chervon sales of power tools that run on lithium batteries increased to $827 million in from $347 million in 2020, according to its prospectus. Other investors include Greenwoods Asset Management Hong Kong, Prime Capital Funds, and Value Partners Hong Kong.

Mainland China is home to the world’s second-largest number of billionaires after the United States.

Hong Kong’s benchmark stock index lost 1.2% on Friday to close at an 18-month low of 23,192.63.

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