Guangzhou Wanglaoji Co will seek a dual listing in Hong Kong and Shanghai in 2007-08 to raise funds to solve its long-time trademark problem, chairman Lee Cho-jat said yesterday.

Wanglaoji is among the top-50 traditional Chinese medicine companies and makes Chinese herbal medicines and beverages.

The listing will help the company enter the global market, Lee was quoted by Ming Pao News as having said. About 48 per cent of the company, which has a brand value of 2.24 billion yuan (US$283 million), is held by Lee through Golden Force Pharmacy.

Hong Kong-listed Guangzhou Pharmaceutical Co, which too holds 48 per cent of Wanglaoji's stakes, confirmed the move, saying it was studying the matter. The Wanglaoji management owns the remaining 4 per cent of the company's shares.

Guangzhou Pharmaceutical Deputy General Manager He Shuhua, however, said the spin-off plan had not been discussed formally at a board meeting and no concrete timeframe for the listing was fixed.

The high popularity of Wanglaoji's brand name has prompted Wong Lo Kat (International) and Guangdong Jiaduobao Drink & Food Co to use its brand name in Hong Kong and Guangdong Province.

"The use of brand right has created a lot of confusion in the market... and that has hindered our overseas expansion too. We hope to use the raised capital from the IPO to solve the problem," Lee said.

Wanglaoji sold about 200 million packs of drinks in 2005. It intends to raise its production capacity to 400 million packs this year and its sales are expected to cross 500 million.

Wanglaoji is a highly reputed beverage brand on the mainland, independent equity analyst Lai Wai-shing said, and the spin-off would benefit its parent company.

Guangzhou Pharmaceutical turned Guangzhou Wanglaoji into a cash cow after purchasing its stakes in the early years. Lai said this was the right time for Guangzhou Pharmaceutical to dispose of the assets.

"Guangzhou Pharmaceutical can reap considerable benefits and quicken the development of Guangzhou Wanglaoji," Lai said.