New shares of four SMEs to go on the market today

By Wang Xinyuan

Four small- and medium-sized enterprises (SMEs) newly listed on the Shenzhen Stock Exchange (SZSE) will simultaneously see their stocks trading today.

The four newly listed SMEs are Zhejiang Asia Pacific Mechanical & Electronic, Shenzhen World Union Properties Consultancy, Tibet Cheezheng Tibetan Medicine, and Baolingbao Biology.

These stocks will not drain much capital away from the market, Yu Tianjia, an analyst at Caitong Securities, told the Global Times yesterday.

Given the recent slew of IPOs and current stock market volatility, it is unlikely that any of the four SMEs will see the 100 to 200 percent gains that many IPOs generated in July and August, Yu said.

Everbright Securities' share price grew 30 percent when it was initially listed in a period of market uncertainty. At the time of issuance, its price earnings (PE) ratio was 58.56. Since none of the four SMEs have a PE ratio that high, they will probably gain 40 to 70 percent, Yu estimated.

Everbright Securities alone raised over five times more capital from its early August IPO than the four SMEs raised together.

Zhejiang Asia Pacific, an auto brake system producer, issued 24 million shares at 18.8 yuan ($2.75) per share, raising a total of 451.2 million yuan ($66 million). The 19.2 million shares subscribed by individual investors on August 17 are available for trading today. The funds raised from the IPO will be invested in its key projects such as anti-locking brake systems, according to its prospectus.

Shenzhen World Union, a real estate consultancy firm first listed on the A-share market, issued 32 million shares August 17 at 19.68 yuan ($2.88) per share, 25.6 million of which will be eligible for trading today. Approximately 319 million yuan out of the 629.8 million yuan raised will be used mainly to expand their number of locations.

Baolingbao, a Shandong producer of starch-based health food ingredients, issued 20 million shares August 17 at 20.56 yuan ($3.01) each, raising 411 million yuan.

About half of the funds are to be spent on its oligofructose and soluble dietary fiber projects. Around 16 million shares issued August 19 are available for trading today.

Cheezheng Tibetan Medicine had 41 million shares issued August 19 at 11.81 yuan ($1.73) each. 32.8 million shares will be eligible for trading today. About 290 million yuan of earned from the IPO will be invested on expanding production, the construction of a technical research center and improving distribution networks.

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