Markets· Equity· IPO

Wankai New Materials’s IPO to debut on Shenzhen Stock Exchange

minutes 2022/03/28 06:58:41

Mar 28, 2022 (China Knowledge) - Wankai New Materials (301216) to start trading on the Shenzhen ChiNext Market Mar 29, tomorrow. The firm has issued 85.85 mln shares priced at RMB 35.68 per share raising RMB 3.06 bln. Its price-to-earnings ratio (PE) stands at 68.21. During subscription the IPO was 4,088 times oversubscribed.

China International Capital Corporation (CICC) acts as the lead underwriter and sponsor for the IPO.

Wankai New Materials Co., Ltd. manufactures packaging materials. The Company produces manmade organic fibers, foam pads, pentaerythritol stretch stretch films, and other products. Wankai New Materials provides services for beverages, edible oils, wine packaging, industrial wires, and other fields.

In FY 2020, Wankai New Materials garnered a total revenue of RMB 9.3 bln, down 4% YoY. In terms of net income, it achieved RMB 203 mln, falling 45% YoY. In H1 2021, the company reported revenue of RMB 4.42 bln, a YoY increase of 15%, and its net profits reached RMB 188 mln, up 22% YoY.

The company is in the basic chemicals industry that is currently made of 364 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 3,870 bln, industry’s average PE of 14 times. The basic chemicals industry’s index is up 69.76% year-to-date, ranking it the 2nd place among all 29 broad industry groupings.

Xinjiang Zhongtai Chemical Co.,Ltd (002092) takes up the top spot in terms of sales in the industry, reporting RMB 84.20 bln of sales in 2020, with a net profit of RMB 146 mln, at 9 times PE. The second largest is Wanhua Chemical Group Co.,Ltd. (600309), a total revenue of RMB 73.43 bln and a net profit of RMB 10.04 bln, at 10 times PE. Sinochem International Corporation (600500) ranked third. It garnered a total revenue of RMB 54.16 bln last year, and a net profit of RMB 307 mln, with 7 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 basic chemicals is 12 times and 27 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 44.13% and the U.S is up 40.90%.

There will be another 2 IPO debut tomorrow, Suzhou Fushilai Pharmaceutical Co.,Ltd. (301258) and Guangdong Taienkang Pharmaceutical Co.,Ltd. (301263).

Since January, a total of 81 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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