Mighty mulls IPO
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by Land Asia Listings
- February 14, 2017
- Real Estate Updates
- 0
Updated February 14, 2017 – 12:00am
http://www.philstar.com/busine
MANILA, Philippines – Mighty Corp., the Bulacan-based cigarette company owned and operated by Filipino-Chinese businessmen Ceasar and Alex Wongchuking, is considering embarking on an initial public offering (IPO).
Aside from a possible IPO, Mighty is also open to partnering with British American Tobacco through contracting in case one of them needs additional capacity.
From an obscure little-known player with a two-percent share before 2012, Mighty has grown its market share 15 times over the last four years.
“We now have a 30 percent share,” Barrientos said.
The local cigarette industry rakes in an estimated P150 billion a year.
According to its latest filing with the Securities and Exchange Commission, Mighty posted a profit of P153.4 million in 2014, up from P104.1 million in 2013.
Sales likewise increased to P11.8 billion from P11.08 billion.
Sought for comment, A&A Securities analyst Justino Calaycay said Mighty has to have a good narrative to be able to convince the market.
“It has to be a very convincingly strong fundamental story. People won’t invest in vice products. They also have to go over the smuggling issues,” Calaycay said.
Mighty is being investigated by the Bureau of Internal Revenue for illicit cigarette trade.
The STAR earlier reported that the Bureau of Customs (BOC) was set to suspend Mighty’s import accreditation due to import violations.
The BOC, under the time of Customs commissioner John Sevilla, recommended the suspension of Mighty‘s import accreditation because of misdeclaration. Sevilla, however, resigned before the BOC could act on it.
BOC data showed that from 2011 to 2013, Mighty used its customs bonded warehouse – supposedly for manufacturing and exportation of finished goods – largely for domestic use.
Data also showed that Mighty declared prices of their imports of acetate tow – a raw material used for cigarettes – at $0.36 per kilogram, below the actual price of their suppliers of $5 to $6 per kg.
