Markets· Equity· IPO

Lubair Aviation Technology’s IPO to debut on Shenzhen Stock Exchange

minutes 2022/06/23 04:27:44

Jun 23, 2022 (China Knowledge) - Lubair Aviation Technology (001316) to start trading on the Shenzhen Stock Exchange's Main Board Jun 24, tomorrow. The firm has issued 20.00 mln shares priced at RMB 29.2 per share raising RMB 584 mln. Its price-to-earnings ratio (PE) stands at 22.99. During subscription the IPO was 7,304 times oversubscribed.

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

Lubair Aviation Technology Co.,Ltd. operates as an aviation material distribution company. The Company wholesales civil aviation fuel, aviation raw materials, aviation chemicals, and other products. Lubair Aviation Technology markets its products throughout China.

In FY 2021, Lubair Aviation Technology garnered a total revenue of RMB 697 mln, down 4% YoY. In terms of net income, it achieved RMB 129 mln, rising 94% YoY. In Q1 2022, the company reported revenue of RMB 123 mln, a YoY decrease of 29%, and its net profits reached RMB 19 mln, down 19% YoY.

The company is in the petroleum and petrochemical industry that is currently made of 46 counters in Shanghai and the Shezhen Stock Exchange with a total combined market capitalization of RMB 3,176 bln, industry’s average PE of 9 times. The petroleum and petrochemical industry’s index is up 25.64% year-to-date, ranking it the 10th place among all 29 broad industry groupings.

China Petroleum & Chemical Corporation (600028) takes up the top spot in terms of sales in the industry, reporting RMB 2,105.98 bln of sales in 2020, with a net profit of RMB 32.92 bln, at 6 times PE. The second largest is Petrochina Company Limited (601857), a total revenue of RMB 1,933.84 bln and a net profit of RMB 19 bln, at 9 times PE. Hengli Petrochemical Co.,Ltd. (600346) ranked third. It garnered a total revenue of RMB 152.37 bln last year, and a net profit of RMB 13.46 bln, with 10 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 petroleum and petrochemical is 20 times and 24 times, respectively. On a year-to-date basis, the industry’s index on the HKEx rises 78.02% and the U.S is up 97.62%.

There will be another 2 IPO debut tomorrow, Loongson Technology Corporation Limited (688047) and Sichuan Y&J Industries Co.,Ltd (833943).

Since January, a total of 160 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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