Pineapple cake maker Vigor Kobo main board IPO delayed

The pastry company was forced to reduce capital as it sees fewer Chinese tourists

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Vigor Kobo store (photo by cxalekd)

Vigor Kobo store (photo by cxalekd)

TAIPEI (Taiwan News) -- Pineapple cake and pastry producer and retailer Vigor Kobo Co., Ltd. (維格餅家) announced a capital reduction that is widely believed to delay its decision on listing shares on the main board of the Taiwan Stock Exchange (TWSE).

Shares of the company had been traded on the Taiwan OTC Exchange (TWO) since 2008. It had been expected to transition to the main board since 2011.

As it is a Chinese concept stock--a company that is reliant on Chinese tourists--and business suffered with declining Chinese tourist numbers,Vigor Kobo was forced to reduce capital by 30 percent or NT$71.136 million (US$2.3 million) to NT$168 million, the company announced last week. Vigor Kobo President Wallen Her (何萬誠) said, however, that the company has sufficient funds, but its long-term capital expenditure plans may be affected.

Her also noted that the company has recently been hit by the downturn in Chinese tourists to Taiwan. He affirmed, however, that the company’s fundamentals are sound and that there is no need to increase capital expenditures in the short-term.

In its first day of trading on the TWO, Vigor Kobo surged 57 percent to NT$135.5, but the stock suffered following the election of President Tsai Ing-wen as Chinese investors pulled out of Taiwanese stocks and Chinese tourists arrived in fewer numbers. On March 10, the company's last recorded trading day on the TWO, shares of Vigor Kobo closed at NT$40.1, well off its 52-week high of NT$62 and less than half its original listing price.

On March 10, the company announced it would pay a NT$7 per share cash dividend for 2016. In November, the company replaced its corporate auditor KPMG Taiwan with PwC Taiwan. According to TWO financial data, Vigor Kobo's revenue totaled NT$113 million with an EPS of NT$2.18 in the second quarter of 2016.