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Tuesday, 6 October 2009

Hengyang Petrochemical Logistics Limited

Hengyang Petrochemical Logistics Limited is the first "S-chip" to go for a Catalist listing. Not sure what so "glam"about this though but the Company is principally engaged in the storage and transportation of liquid petrochemical products.  The company currently has 37 storage tanks with a 97,600 m3 capacity.  The company has commenced construction and installation of another 12 new carbon steel storage tanks to be completed in Q4 2009.  Another facility will be completed in 2 phases will add another 118 new storage tanks and 300,000 m3 capacity.  The company is offering 18m new shares via placement at $0.38 each and the offer will end on 8 Oct 2009. 

Revenue for FY 2008 is RMB 65.3m and profit after tax is RMB 25.9m. The first half 2009 revenue is RMB 31.7m (decrease of 3%) and profit after tax is RMB 9.97m (decrease of 31.5%),  Assuming the service agreement is in place and based on the post-invitation no. of shares, the EPS for FY 2008 will be 4.32 cents. This translate into a historical PER of 8.8x at listing. With the profit declining by 31% and assuming this trend continue, FY2009 full year EPS is likely to be 3.024 cents and that will translate into a forward PER of 12.5x. The market cap is $44.8 million based on the IPO price.

The company is one of the "better-looking"catalist listing but is fully priced at the IPO price. However, the future plans looked somewhat exciting as more storage capacity come on stream progressively. Lets see if the management can deliver value to its shareholders next time.


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