Private tyre component supplier plans IPO
By Zhang Jin (China Daily)
Updated: 2004-10-26 08:52

Junma Tyre Cord Co, a private tyre component supplier, will be listed in Singapore in November, the latest move from a Chinese small and medium-sized enterprise (SME) to raise funds on an overseas bourse.

According to Ling Dongying, assistant vice-president of the Listings Markets Group of the Singapore Exchange (SGX), the company will be listed next month and will become the second S-share in Singapore after Tianjin-based Zhongxin Pharmaceutical Group Co Ltd.

S-shares stands for stocks of Chinese companies that register on the Chinese mainland and list directly in Singapore. The concept is to differentiate them from Singapore-listed Chinese firms registered outside the mainland.

Junma is also the first Chinese company to seek a listing of S-shares on the SESDAQ exchange (the Stock Exchange of Singapore Dealing and Automated Quotation), the secondary board of the SGX tailored for small-scale, growing businesses.

The Jiangsu-based Junma hopes to raise at least US$15.2 million through an offer of US$9.2 million public shares and US$82.8 million placement shares.

The company is the second largest for the tyre cord maker in China and had a capacity of 3,800 tons of tyre cord fabric last year, according to its farmer-turned-entrepreneur chairman Yang Peixing.

The six-year-old Junma held net assets of 240 million yuan (US$29 million) by the end of last year.

The tyre cord maker plans to spend the money raised from the IPO to expand its production capacity and markets in a bid to meet the soaring demands for tyre components in China.

Analysts point out that manufacturers like Junma will have a wealth of business opportunities in the next year since China's auto industry is experiencing breakneck development.

"Generally speaking, with the automobile industry rolling on a fast track, demand for car components will also surge in the coming year," said Jia Xinguang, chief analyst at the China National Automotive Industry Consulting and Development Corporation.

Junma's listing will also help raise the company's international profile and its globalization endeavours, according to Yang.

"To list in Singapore is also aimed to expand our presence in the Southeast Asian market and accelerate our exports internationally," said Yang.

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