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Markets · Equity · IPO
Anhui Hwasu’s IPO to debut on Shanghai Stock Exchange
2021/11/25 07:13:40

Nov 25, 2021 (China Knowledge) - Anhui Hwasu (600935) to start trading on the Shanghai Stock Exchange's Main Board Nov 26, tomorrow. The firm has issued 385.99 mln shares priced at RMB 3.94 per share raising RMB 1.52 bln. Its price-to-earnings ratio (PE) stands at 22.95. During subscription the IPO was 871 times oversubscribed.

Guoyuan Securities, CITIC Securities acted as the lead underwriter, and Guoyuan Securities served as the sponsor for the IPO.

Anhui Hwasu manufactures and distributes chemical products. The company produces polyvinyl chloride, caustic soda, cements, calcium carbide, and more. Anhui Hwasu also produces vacuum salts, paper plastic composite packaging bags, composite plastic woven bags, and other products.

In FY 2020, Anhui Hwasu garnered a total revenue of RMB 5.08 bln, up 11% YoY. In terms of net income, it achieved RMB 613 mln, rising 23% YoY. In the first three quarters of 2021, the company reported revenue of RMB 4.58 bln, a YoY increase of 28%, and its net profits reached RMB 585 mln, up 57% YoY.

The company is in the basic chemicals industry that is currently made of 350 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 4,172 bln, industry’s average PE of 39 times. The basic chemicals industry’s index is up 84.57% year-to-date, ranking it the 2nd place among all 29 broad industry groupings.

Xinjiang Zhongtai Chemical Co.,Ltd (002092) takes up the top spot in terms of sales in the industry, reporting RMB 84.20 bln of sales in 2020, with a net profit of RMB 146 mln, at 8 times PE. The second largest is Wanhua Chemical Group Co.,Ltd. (600309), a total revenue of RMB 73.43 bln and a net profit of RMB 10.04 bln, at 13 times PE. Sinochem International Corporation (600500) ranked third. It garnered a total revenue of RMB 54.16 bln last year, and a net profit of RMB 307 mln, with 9 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 basic chemicals is 17 times and 34 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 80.42% and the U.S is up 28.93%.

There will be another 2 IPO debut tomorrow, Guangzhou Jinzhong Auto Parts Manufacturing Co., Ltd. (301133) and Qingdao Yunlu Advanced Materials Technology Co., Ltd. (688190).

Since January, a total of 420 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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