Markets· Equity· IPO

Guangzhou Jinzhong Auto Parts Manufacturing’s IPO to debut on Shenzhen Stock Exchange

minutes 2021/11/25 07:13:17

Nov 25, 2021 (China Knowledge) - Guangzhou Jinzhong Auto Parts Manufacturing (301133) to start trading on the Shenzhen ChiNext Market Nov 26, tomorrow. The firm has issued 26.53 mln shares priced at RMB 14.33 per share raising RMB 380.17 mln. Its price-to-earnings ratio (PE) stands at 32.55. During subscription the IPO was 6,574 times oversubscribed.

Nanjing Securities acts as the lead underwriter and sponsor for the IPO.

Guangzhou Jinzhong Auto Parts Manufacturing manufactures and distributes automobile exterior decoration products. The company produces wheel hub decorative covers, hub center covers, hub inserts, nut covers, car word marks, car signs, steering wheel marks, and other products. Guangzhou Jinzhong Auto Parts Manufacturing also markets its products worldwide.

In FY 2020, Guangzhou Jinzhong Auto Parts Manufacturing garnered a total revenue of RMB 396 mln, up 6% YoY. In terms of net income, it achieved RMB 49 mln, falling 13% YoY. In the first three quarters of 2021, the company reported revenue of RMB 373 mln, a YoY increase of 46%, and its net profits reached RMB 28 mln, up 19% YoY.

The company is in the automobile industry that is currently made of 238 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 4,483 bln, industry’s average PE of 37 times. The automobile industry’s index is up 45.31% year-to-date, ranking it the 7th place among all 29 broad industry groupings.

SAIC Motor Corporation Limited (600104) takes up the top spot in terms of sales in the industry, reporting RMB 742.13 bln of sales in 2020, with a net profit of RMB 20.43 bln, at 10 times PE. The second largest is Weichai Power Co.,Ltd. (000338), a total revenue of RMB 197.49 bln and a net profit of RMB 9.21 bln, at 14 times PE. China Grand Automotive Services Group Co., Ltd. (600297) ranked third. It garnered a total revenue of RMB 158.44 bln last year, and a net profit of RMB 1.52 bln, with 11 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 automobile is 32 times and 35 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 28.09% and the U.S is up 43.77%.

There will be another 2 IPO debut tomorrow, Anhui Hwasu Co.,Ltd. (600935) 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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