Anchun International Holdings Limited

Anchun International Holdings Limited (“Anchun”) is offering 130m shares at $0.28 each where 105m are new shares and 25m are vendor shares. 2m will be for the public and the rest via placement. The IPO will close on 21 Oct at 12pm. The Company is a leading integrated chemical systems engineering and technology solutions provider to PRC petrochemical and chemical industries, In particular, manufacturers of ammonia and methanol based products. The company was awarded the 2009 Forbes China Up * Comers award by Forbes China magazine.

Revenue grew from RMB 114.8m in FY2007 to RMB 294.8m in FY2009 and net profit grew from RMB 38.4m to RMB 75.2m during the same period. Assuming the service agreement is in place in FY2009 and based on the post IPO shares of 505m shares, the EPS will be RMB 14.6c or approximately Singapore 2.93 cents. That translate into a listing PER of 9.56x. The market cap based on the IPO price is S$141.4m.

Looking at the pre-IPO investors, you can see a familiar name Ma Ong Kee, who get in a very cheap price. Let’s see if he can do some magic to this counter. China XLX, a company listed on HK and Spore is another pre-ipo investor in this counter.

Assuming the company can grow at a conservative 25%, the EPS will be 3.7 Singapore cents and that translate into a forward PE of 7.56x. The company reminded me of an old S-chip favorite that has fallen out of favor. Jiutian Chemical. Ring a bell? Anyway, the public float will be small, only 2m, so getting it will be tough. Looking at current sentiment, just treat it as a apply-and-sell type (stag) and you should be fine but don’t fall in love with it.