Liu Minxia

    mllmx@msn.com

    WHILE Professor Do Min-Joon, an alien in a recent popular Korean drama, is winning the hearts of Chinese audiences, Laoganma, a chili sauce brand from China’s Guizhou Province, is tantalizing the taste buds of food lovers in countries such as South Korea.

    Laoganma, loosely translated as “godmother,” landed in the South Korean market last month where it is selling fast at 3,800 South Koran won (US$3.59), or 21 yuan (US$3.59), a jar in the country’s second-largest retailer, Homeplus.

    Crowned as the most sophisticated, toothsome hot sauce in the world by U.S. flash sale e-commerce firm Gilt, Laoganma has also gained popularity in 30-odd other countries including the United States and New Zealand.

    As the biggest chili food manufacturer in China, achieving 3.72 billion yuan in global sales and 510 million yuan in net profit last year, Guiyang Nanming Laoganma Special Flavour Foodstuffs Co., which makes the popular Laoganma chili sauce, is strangely determined not to go public, in stark contrast with the fact that most corporations of a certain size can’t wait to sell their shares on a stock exchange given the influx of cash and recognition that accompanies a listing.

    China has more than 2,400 firms traded on the Shanghai and Shenzhen stock exchanges, with 682 companies still queuing for initial public offering (IPO) approvals as of Monday.

    Laoganma has been a target of IPO sponsors for a long time, but it is difficult to approach the top management of the company, insiders say. Some sponsors asked local government officials to help persuade Tao Huabi, chairman of Laoganma, but no one succeeded.

    “I’m determined not to list the company on the stock market,” said outspoken and illiterate Tao, who peddled self-made chili sauce before setting up the company in 1997.

    “Going public is like cheating people out of money, as some shareholders will sell the shares for quick profit, and then I’ll be left to pay off the debts. Thus, to any government official coming to talk to me about going public, my reply was, ‘Forget about it! No way! If you ask for money, I do not have any. I have only my life; you take it!’”

    Known for its three “Nos” — no bank loans, no financing and no going public — the company borrowed from banks only for once since being created, and that was to help the bank.

    “Laoganma is a company with a simple structure and a simple business model,” said Xu Xiang, head of Shenzhen Capital Group Co.’s Southwest China branch.

    “I think this model is reasonable. I’ve never approached it to persuade it to go public. To me, those who wanted to have it listed were aiming for quick money. It is a very cheap idea. Laoganma has enough cash. Just let it grow in its own way,” Xu said.

    Laoganma is not the lone Chinese firm that prefers to remain private and thrive on its own accord.

    Private firms that have grown to sizes rivaling those of their largest publicly traded counterparts include Huawei Technologies, Hangzhou Wahaha Group, SF Express, Guangzhou Liby Enterprise Group and Fotile Kitchenware Co.

    Ren Zhengfei, founder and CEO of Shenzhen-based Huawei, once said: “If Huawei lists shares too early, a batch of employees will become millionaires and billionaires. Their passion for work will ebb, which would be a sad thing for Huawei, as every high-tech firm relies on its talented employees for growth.”