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HONG KONG, Sept 3, 2010 - (ACN Newswire) - China Sanjiang Fine Chemicals Company Limited ("China Sanjiang" or the "Group", stock code: 2198.HK), is the largest privately-owned manufacturer and supplier of both ethylene oxide and AEO surfactants which are the core components for household cleansing and cosmetic products in China. Today, China Sanjiang announces details of the listing of its Shares under the global offering on the Main Board of The Stock Exchange of Hong Kong Limited.
China Sanjiang will offer a total of 252,400,000 shares globally, among which 227,160,000 shares will be offered via an international placing and 25,240,000 shares will be publicly offered in Hong Kong (subject to adjustment). The public float will represent approximately 25.01% of the Group's enlarged issued share capital.
The maximum offer price is HK$3.38 per share and the lowest offer price is HK$2.38. Together with other trading fees, a total of HK$3,414.11 per board lot of 1,000 shares. The corresponding historical P/E multiple for the year ended 31 December 2009 based on the offer price range is 8.7 times and 12.3 times respectively.
After deducting related expenses, assuming an Offer Price of HK$2.88 per Share, which is the mid-point of the indicative range of the Offer Price of HK$2.38 to HK$3.38 per Share. The aggregate amount of the net proceeds from the Global Offering is estimated to be approximately HK$672.7 million, the Group plans to use the net proceeds of the Global Offering as follows:
- up to 67% will be used for the third and fourth phase construction of production facilities of ethylene oxide with designed annual production capacities of 60,000 MT and 100,000 MT respectively;
- up to 15% will be used for potential acquisitions of existing surfactant manufacturing or related business in the PRC;
- up to 12% will be used for capital contribution and investment in Sanjiang Honam, a sino-foreign joint venture company jointly established and controlled by Honam Petrochemical Corp. and us. The capital injected will be used for the construction of production facilities of Sanjiang Honam to produce ethylene oxide;
- up to 6% will be used for construction of ethylene storage tank with a total storage capacity of approximately 22,000 cubic metres; and
- the remaining balance will be used for general working capital purposes
China Sanjiang's public offer will begin on 3 September 2010, and close at 12:00 noon on 8 September 2010. Allotment results will be announced on 15 September 2010. Dealings in the shares will commence on 16 September 2010 on the Main Board of the HKEx with stock code 2198.
BOCOM International (Asia) Limited is the sole global coordinator. BOCOM International (Asia) Limited and Daiwa Capital Markets Hong Kong Limited are the joint bookrunners, joint lead managers and joint sponsors.
The Group's major products are consumer chemicals and their ingredients, namely ethylene oxide and AEO surfactants. The group is able to produce over 100 types of surfactants with various application purposes. The Group's AEO surfactants are mainly used in the manufacture of household cleansing agents such as liquid detergents, cosmetics and ointments products. In addition to ethylene oxide and AEO surfactants, we are also engaged in the provision of ethylene oxide and surfactant processing services to customers as well as the production and supply of other chemical products such as liquefied nitrogen, ethylene glycol and industrial gases, namely oxygen, nitrogen and argon.
China Sanjiang's success to date and potential for future growth are attributable to their competitive strengths, which include the following:
- Maintain a leading market position and benefited from the rapid market growth
- Increase the profitability through vertical integration and optimisation of product mix
- The strategic location of our production base allows convenient transportation of raw materials and products at low transportation costs
- Stable and reliable supply of raw materials to ensure stable production by the High entry barrier to the ethylene oxide manufacturing industry thereby limiting competition from new entrants
- Maintain a strong relationship with quality customers
- Experienced and dedicated management team
China Sanjiang is the largest privately-owned manufacturer and supplier of both ethylene oxide and AEO surfactants. Their share in China's ethylene oxide market was approximately 11% in 2007 increased to approximately 19% in 2009 and their share in China AEO surfactants market increased from approximately 7% in 2007 to approximately 13% in 2009 in terms of market share by production volume. Currently, the aggregate designed annual production capacities of ethylene oxide and surfactants were approximately 120,000MT and 218,000MT respectively.
Strategic location of production base allows convenient transportation of raw materials and products at low transportation costs. Jaixing Production Plant is located in the Zhapu Development Zone of Jiaxing, Zhejiang Province, and is in close proximity to the Port of Zhapu which is a national first class open port for international trade. Meanwhile, in the Port of Zhapu, the group has installed the largest ethylene storage tank in China which has a storage capacity of approximately 22,000 cubic metres. The tank provides a buffer to absorb short term price fluctuation of ethylene.
Capitalising on its competitive advantages, China Sanjiang has achieved growth in both revenue and profit attributable to equity holders of the parent. For the year ended 31 December 2009, the revenue increase from approximately RMB876.8 million in 2007 to RMB 1,285.5 million, with a CAGR of 21.1% between 2007 and 2009. While the net profit attributable to equity holders of parent increased from approximately RMB 147.4 million in 2007 to approximately RMB242.1 million in 2009, with a CARG of 28.2% between 2007 and 2009.
China Sanjiang aim to maintain and further strengthen our position as the largest privately-owned manufacturer and supplier of both ethylene oxide and AEO surfactants in China and to maximize shareholders' value, by pursuing the following strategies:
- Strengthen the leading market position in China through expansion of production capacity
- Expand product coverage and functionality, improve product quality and further maximize profitability
- Selectively seek acquisition opportunities
- Improve production efficiency and reduce production costs
- Increase raw material storage capacity by constructing new ethylene storage tank to accommodate increasing production capacity.
Contact:
Eric Yip
Sally Wong
Christensen International Limited
Tel：+852 2117 0681
Fax: +852 2117 0869
Topic: New Listing on Exchange
Source: China Sanjiang Fine Chemicals Co., Ltd.
Sectors: Daily Finance, Chemicals, Spec.Chem
https://www.acnnewswire.com
From the Asia Corporate News Network
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