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Hong Kong-based garment maker Crystal to launch an IPO

Crystal is going in for an IPO. The company founded in 1970, is a Hong Kong-based garment manufacturer which supplies to customers including Fast Retailing, the owner of fashion chain Uniqlo, Gap, H&M, and L Brands, which operates the brand Victoria's Secret.

The company plans to use 45 per cent of its net proceeds to expand its manufacturing capacity in Vietnam, where it is already larger than in China, and Bangladesh over the next three years. The company also plans to expand into fabric production and repay loans. Crystal will invest over $400 million in capital expenditure from 2017 to 2019, which will improve its production capacity by more than 50 per cent.

Fast Retailing has agreed to subscribe shares worth the equivalent of $20 million, while L (Overseas) Holdings, a subsidiary of L Brands, will subscribe $10 million worth of shares. Crystal's net profit rose 31 per cent in the first half of this year.

Most of the firm’s revenue comes from a handful of big customers, with sales to its five largest customers accounting for almost 70 per cent of revenues last year. It now has 20 manufacturing facilities in China, Vietnam, Cambodia, Bangladesh, and Sri Lanka, producing six categories of product: lifestyle wear, denim, intimate, jumpers, sportswear, and outdoor apparel.