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Thursday, 10 September 2009
China Gaoxian to raise $83.2m through mainboard IPO
China Gaoxian Fibre Fabric Holdings Ltd has launched its initial public offering to raise $83.2 million in what is Singapore’s biggest IPO so far this year.
China Gaoxian to raise $83.2m through mainboard IPO
380m offer shares at 26 cents each
By FELDA CHAY 10 September 2009
China Gaoxian Fibre Fabric Holdings Ltd has launched its initial public offering to raise $83.2 million in what is Singapore’s biggest IPO so far this year.
The China-based polyester fibre producer is raising the proceeds from the offer of 320 million new shares at 26 cents each for a Singapore Exchange mainboard listing. Also offered are 60 million vendor shares, making it an IPO of 380 million shares.
Of these, five million will be offered via public float, and the remaining 375 million placed with institutional buyers. The invitation shares represent about 26.4 per cent of the group’s enlarged capital of 1.44 billion shares.
The offer opens today and closes on Sept 16. Trading of its shares on the Singapore Exchange main board is expected to begin on Sept 18.
At 26 cents a share, the invitation is priced at a historical price-to-earnings ratio of 3.7 times, based on the group’s net earnings per share of 7.08 cents for FY2008 and its pre-invitation share capital of 1.12 million shares.
The company’s IPO listing is the largest so far this year followed by that of China-based Passion Holdings - making S-chip listings the largest of the 10 IPOs launched this year, including Catalist listings.
China Gaoxian said that a large part of its estimated net proceeds of $78.2 million will be used to expand its production capacity and downstream business. It expects to use $33 million to expand its production capacity of premium differentiated fine polyester yarn, and $35 million on the downstream fabric manufacturing business.
‘The plan is to expand downstream for a more integrated value chain,’ said its chief financial officer Raymond Wong.
It is set to build a fabric manufacturing factory in China’s Fujian province in the next few months, said Mr. Wong.
While the economic downturn has led to a general slowdown in the synthetic fibre industry, the company’s chief executive Cao Xiangbin said that China Gaoxian’s business outlook remains bright.
‘The textile and garment industries in the People’s Republic of China have experienced good growth and development over the past years,’ said Mr. Cao.
‘While there has been a general slowdown in the synthetic fibre industry on the back of a decline in overseas demand, domestic demand for premium differentiated fine polyester yarn and fabric remains relatively firm.’
For FY2008, China Gaoxian reported that net profit leapt 47.9 per cent to 390.4 million yuan (S$81.5 million) from a year ago. Revenue jumped 36.8 per cent to 1.83 billion yuan on an increase in sales volume and average unit selling price.
Collins Stewart Pte Ltd is the issue manager for the listing. It is also the joint underwriter and placement agent for the listing, along with UOB-Kay Hian.
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China Gaoxian to raise $83.2m through mainboard IPO
380m offer shares at 26 cents each
By FELDA CHAY
10 September 2009
China Gaoxian Fibre Fabric Holdings Ltd has launched its initial public offering to raise $83.2 million in what is Singapore’s biggest IPO so far this year.
The China-based polyester fibre producer is raising the proceeds from the offer of 320 million new shares at 26 cents each for a Singapore Exchange mainboard listing. Also offered are 60 million vendor shares, making it an IPO of 380 million shares.
Of these, five million will be offered via public float, and the remaining 375 million placed with institutional buyers. The invitation shares represent about 26.4 per cent of the group’s enlarged capital of 1.44 billion shares.
The offer opens today and closes on Sept 16. Trading of its shares on the Singapore Exchange main board is expected to begin on Sept 18.
At 26 cents a share, the invitation is priced at a historical price-to-earnings ratio of 3.7 times, based on the group’s net earnings per share of 7.08 cents for FY2008 and its pre-invitation share capital of 1.12 million shares.
The company’s IPO listing is the largest so far this year followed by that of China-based Passion Holdings - making S-chip listings the largest of the 10 IPOs launched this year, including Catalist listings.
China Gaoxian said that a large part of its estimated net proceeds of $78.2 million will be used to expand its production capacity and downstream business. It expects to use $33 million to expand its production capacity of premium differentiated fine polyester yarn, and $35 million on the downstream fabric manufacturing business.
‘The plan is to expand downstream for a more integrated value chain,’ said its chief financial officer Raymond Wong.
It is set to build a fabric manufacturing factory in China’s Fujian province in the next few months, said Mr. Wong.
While the economic downturn has led to a general slowdown in the synthetic fibre industry, the company’s chief executive Cao Xiangbin said that China Gaoxian’s business outlook remains bright.
‘The textile and garment industries in the People’s Republic of China have experienced good growth and development over the past years,’ said Mr. Cao.
‘While there has been a general slowdown in the synthetic fibre industry on the back of a decline in overseas demand, domestic demand for premium differentiated fine polyester yarn and fabric remains relatively firm.’
For FY2008, China Gaoxian reported that net profit leapt 47.9 per cent to 390.4 million yuan (S$81.5 million) from a year ago. Revenue jumped 36.8 per cent to 1.83 billion yuan on an increase in sales volume and average unit selling price.
Collins Stewart Pte Ltd is the issue manager for the listing. It is also the joint underwriter and placement agent for the listing, along with UOB-Kay Hian.
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