As wealth surges in China, there's also been a spike in luxury spending. For example, the country's jewelry industry was $14 billion in 2005 and is expected to be the largest – in the world – in about two years.
Riding the wave is Fuqi International (NASDAQ: FUQO -- quote not available on AOL yet), one of the top jewelry makers in China. In fact, the company has gone public today, with the stock rising 16% to $10.47 (this is after the stock priced at the high end of its $7-$9 range).
The company has an extensive set of luxury products, which count more than 20,000. What's more, Fuqi has a vertically integration operation, which includes development, sales, marketing, order fulfillment and delivery.
No doubt, it's a high margin business. In fact, Fuqi marks up its products by over 40% on average.
So far, the growth has been particularly strong. From 2002 to 2006, revenues increased an average of 57% per annum (to $92.4 million).
With the proceeds from its public offering, Fuqi will have the resources to continue ramping growth. For example, the company plans to have eight to ten retail stores by next year.
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Tom Taulli is the author of various books, including The Complete M&A Handbook
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