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Markets · Equity · IPO
Shandong Kaisheng New Materials’s IPO to debut on Shenzhen Stock Exchange
2021/09/24 11:31:25

Sep 24, 2021 (China Knowledge) - Shandong Kaisheng New Materials (301069) to start trading on the Shenzhen ChiNext Market Sep 27, next Monday. The firm has issued 60.00 mln shares priced at RMB 5.17 per share raising RMB 310.2 mln. Its price-to-earnings ratio (PE) stands at 13.78. During subscription the IPO was 5,165 times oversubscribed.

Southwest Securities, Guodu Securities acted as the lead underwriter, and Southwest Securities served as the sponsor for the IPO.

Shandong Kaisheng New Materials manufactures and distributes chemicals. The company produces sulfoxide chloride, phthaloyl chloride, chloric ether, nitrobenzoyl chloride, polyetherketoneketone, and other related products. Shandong Kaisheng New Materials markets its products worldwide.

In FY 2020, Shandong Kaisheng New Materials garnered a total revenue of RMB 624 mln, down 5% YoY. In terms of net income, it achieved RMB 160 mln, rising 17% YoY. In H1 2021, the company reported revenue of RMB 399 mln, a YoY increase of 23%, and its net profits reached RMB 95 mln, down 10% YoY.

The company is in the chemicals industry that is currently made of 418 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 7,302 bln, industry’s average PE of 37 times. The chemicals industry’s index is up 84.90% year-to-date, ranking it the 4th place among all 29 broad industry groupings.

China Petroleum & Chemical Corporation (600028) takes up the top spot in terms of sales in the industry, reporting RMB 2,105.98 bln of sales in 2020, with a net profit of RMB 32.92 bln, at 6 times PE. The second largest is Hengli Petrochemical Co.,Ltd. (600346), a total revenue of RMB 152.37 bln and a net profit of RMB 13.46 bln, at 12 times PE. Rongsheng Petrochemical Co., Ltd. (002493) ranked third. It garnered a total revenue of RMB 107.26 bln last year, and a net profit of RMB 7.31 bln, with 19 times PE.

The average industry’s PE for the same or similar stocks on Hong Kong Exchange (HKEx) and the U.S. stock markets for chemicals is 25 times and 36 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 78.21% and the U.S is up 16.35%.

Since January, a total of 363 companies have listed on either Shanghai or Shenzhen Stock Exchange, most are mainly in the machinery equipment, electronics and pharmaceutical and biological industries.

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