Markets· Equity· IPO

Dezhou United Petroleum Technology’s IPO to debut on Shenzhen Stock Exchange

minutes 2022/01/14 03:25:10

Jan 14, 2022 (China Knowledge) - Dezhou United Petroleum Technology (301158) to start trading on the Shenzhen ChiNext Market Jan 17, next Monday. The firm has issued 37.59 mln shares priced at RMB 15.64 per share raising RMB 587.95 mln. Its price-to-earnings ratio (PE) stands at 41.62. During subscription the IPO was 5,823 times oversubscribed.

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

Dezhou United Petroleum Technology Co.,Ltd. manufactures and distributes oil field machinery equipment. The Company produces drilling tools, drilling equipment, oil and gas exploitation equipment, wellhead control equipment, and other equipment. Dezhou United Petroleum Technology also provides repairing services.

In FY 2020, Dezhou United Petroleum Technology garnered a total revenue of RMB 422 mln, down 10% YoY. In terms of net income, it achieved RMB 60 mln, falling 6% YoY. In the first three quarters of 2021, the company reported revenue of RMB 222 mln, a YoY increase of 1%, and its net profits reached RMB 28 mln, up 6% YoY.

The company is in the machinery equipment industry that is currently made of 464 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 4,026 bln. The machinery equipment industry’s index is up 20.51% year-to-date, ranking it the 12th place among all 29 broad industry groupings.

CRRC Corporation Limited (601766) takes up the top spot in terms of sales in the industry, reporting RMB 227.66 bln of sales in 2020, with a net profit of RMB 11.33 bln, at 16 times PE. The second largest is Sany Heavy Industry Co.,Ltd. (600031), a total revenue of RMB 100.05 bln and a net profit of RMB 15.43 bln, at 13 times PE. China International Marine Containers (Group) Co., Ltd (000039) ranked third. It garnered a total revenue of RMB 94.16 bln last year, and a net profit of RMB 5.35 bln, with 5 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 machinery equipment is 22 times and 30 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 42.14% and the U.S is up 32.32%.

There will be another 2 IPO debut next Monday, Bank of Lanzhou Co., Ltd. (001227) and Jiayuan Science and Technology Co.,Ltd. (301117).

Since January, a total of 521 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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