Markets· Equity· IPO

GAD Environmental Technology’s IPO to debut on Shenzhen Stock Exchange

minutes 2021/09/15 07:36:22

Sep 15, 2021 (China Knowledge) - GAD Environmental Technology (300854) to start trading on the Shenzhen ChiNext Market Sep 16, tomorrow. The firm has issued 24.80 mln shares priced at RMB 9.96 per share raising RMB 247.01 mln. Its price-to-earnings ratio (PE) stands at 11.32. During subscription the IPO was 7,315 times oversubscribed.

Central China Securities acts as the lead underwriter and sponsor for the IPO.

GAD Environmental Technology engages in solid waste pollution prevention and control. The Company provides domestic waste pollution isolation, general industrial solid waste pollution isolation, hazardous waste pollution isolation, and other services. GAD Environmental Technology also offers ecological restoration services.

In FY 2020, GAD Environmental Technology garnered a total revenue of RMB 689 mln, up 1% YoY. In terms of net income, it achieved RMB 105 mln, rising 25% YoY. In H1 2021, the company reported revenue of RMB 263 mln, a YoY increase of 15%, and its net profits reached RMB 34 mln, up 28% YoY.

The company is in the utility industry that is currently made of 202 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 3,469 bln, industry’s average PE of 21 times. The utility industry’s index is up 41.64% year-to-date, ranking it the 8th place among all 29 broad industry groupings.

Huaneng Power International,Inc. (600011) takes up the top spot in terms of sales in the industry, reporting RMB 169.44 bln of sales in 2020, with a net profit of RMB 4.56 bln, at 34 times PE. The second largest is GD Power Development Co.,Ltd. (600795), a total revenue of RMB 116.42 bln and a net profit of RMB 2.63 bln, at 13 times PE. Datang International Power Generation Co.,Ltd. (601991) ranked third. It garnered a total revenue of RMB 95.61 bln last year, and a net profit of RMB 3.04 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 utility is 12 times and 37 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 46.37% and the U.S is up 8.75%.

There will be another 2 IPO debut tomorrow, Shaanxi Meibang Pharmaceutical Group Co., Ltd. (605033) and Zhejiang Zone-King Environmental Sci&Tech Co., Ltd. (688701).

Since January, a total of 353 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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