China High Speed gears for growth with offering
Winnie Pang
Wednesday, June 20, 2007
The mainland's leading maker of gears for wind turbines, which opens for retail subscription today, said the business is on course for solid growth.
Hu Yueming, chairman of Nanjing-based China High Speed Transmission Equipment Group, said the segment is expected to perform strongly over the next few years. The company also makes transmission equipment for marine vessels, aerospace, rail transport and construction.
China High Speed Transmission aims to raise up to HK$2.12 billion in an initial stock offering. The float will be 25 percent of its enlarged issued share capital. It is offering 300 million new shares at an indicative price range of between HK$5.38 and HK$7.08.
The proceeds will be used mainly for research and development, as well as raising production capacity.
Morgan Stanley is sponsoring the deal. The offer price values the company at between 35.2 times and 46.3 times 2007 forecast earnings.
The company says profit for this year after tax and minority interests, excluding one-off exceptional items, will be no less than 180 million yuan (HK$184.6 million). Net profit last year rose 5 percent to 85.6 million yuan.
Asked about the projected strong growth, chief financial officer Edward Lui Wing-hong said it excluded a one-off loss from changes in the fair value of convertible bonds issued within the period.
He said the projected 80 percent profit rise for this year would be supported by growth in the wind- gear business. Revenue from wind gear surged to 317.7 million yuan last year from 26.5 million yuan in 2005.
The segment accounted for 26.8 percent of sales, compared with just 2.8 percent in 2005. This makes it the largest segment in its product portfolio.
General Electric, a strategic investor with a 5 percent holding, will purchase 15 million shares in the IPO to maintain its stake.
The retail offering closes Monday, with trading set for July 4.
Winnie Pang
Wednesday, June 20, 2007
The mainland's leading maker of gears for wind turbines, which opens for retail subscription today, said the business is on course for solid growth.
Hu Yueming, chairman of Nanjing-based China High Speed Transmission Equipment Group, said the segment is expected to perform strongly over the next few years. The company also makes transmission equipment for marine vessels, aerospace, rail transport and construction.
China High Speed Transmission aims to raise up to HK$2.12 billion in an initial stock offering. The float will be 25 percent of its enlarged issued share capital. It is offering 300 million new shares at an indicative price range of between HK$5.38 and HK$7.08.
The proceeds will be used mainly for research and development, as well as raising production capacity.
Morgan Stanley is sponsoring the deal. The offer price values the company at between 35.2 times and 46.3 times 2007 forecast earnings.
The company says profit for this year after tax and minority interests, excluding one-off exceptional items, will be no less than 180 million yuan (HK$184.6 million). Net profit last year rose 5 percent to 85.6 million yuan.
Asked about the projected strong growth, chief financial officer Edward Lui Wing-hong said it excluded a one-off loss from changes in the fair value of convertible bonds issued within the period.
He said the projected 80 percent profit rise for this year would be supported by growth in the wind- gear business. Revenue from wind gear surged to 317.7 million yuan last year from 26.5 million yuan in 2005.
The segment accounted for 26.8 percent of sales, compared with just 2.8 percent in 2005. This makes it the largest segment in its product portfolio.
General Electric, a strategic investor with a 5 percent holding, will purchase 15 million shares in the IPO to maintain its stake.
The retail offering closes Monday, with trading set for July 4.
