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Jiangsu Limin's IPO Application Denied by CSRC
Jiangsu Limin's IPO application is denied by CSRC on 16 May 2011.
However, after the disclosed information, some insiders indicate that the IPO application denied by CSRC may be attributed to the imperfect equipment and technology in Jiangsu Limin that may cause security incidents. And some other insiders say that some products detected by local government as the disqualified ones in 2008 have named Jiangsu Limin on the blacklist of pesticide industry, and therefore the denial of the IPO application by CSRC is predictable.
With the slight recovery in domestic pesticide in recent years and being one of the main fungicide players in China, Jiangsu Limin has enjoyed good performance in the last three years despite the downturn of pesticide industry in China. Its revenue and net profit in 2010 reaches USD79.45 million and USD14.08 million, up 9.98% and 52.81% over 2009, respectively.
After analyzing the IPO application materials, one more problem comes out. The largely increased net profit in 2010 was not totally from its pesticide business but mainly from relocation subsidies from local government, reaching USD3.51 million, eight times more than that in 2009. Obviously, the net profit amount of Jiangsu Limin in 2010 makes little difference with that in 2009 if excluding the large relocation subsidies.
Owing to these problems above, it is predicted that Jiangsu Limin will not be able to get listed in the near future, at least not in 2011, and we still need to wait for more authoritative information from Jiangsu Limin. Although it is still hard to predict how long it will take for Jiangsu Limin to solve the problems blocking its IPO, its business strength still show great potential for it to enter capital market.
Actually, Jiangsu Limin has started planning IPO in 2009 and then submitted the application to CSRC for listing in March 2010. It has ever declared to get listed at the end of 2010, but for some reasons the application auditing lasted for more than one year has finally been denied this time.
According to Jiangsu Limin, it planned to issue 25 million shares on Shenzhen Stock Exchange and it will account for 25% of the total stocks after the IPO. It also released that if the IPO goes well, the raised capital will be mainly used in its new fungicide projects, namely 300t/a 1,3-cyclohexanedione and 500t/a thiacloprid technical and formulation projects.
Eyeing the good performance and potential strength of Jiangsu Limin and the good prospect of fungicide industry in China, the company has started to expand in recent years, especially in 2009.
In Sept. 2009, Jiangsu Limin received venture capital of USD10.25 million from Beijing Huida Jiuding Investment & Management Company (Jiuding Capital), a large venture capital company in China. In late 2009, Jiangsu Limin invested USD32.20 million to construct new projects of pyrimethanil, cymoxanil, azoxystrobin and folpet, in order to strengthen its competitiveness.
It now possesses four subsidiaries and two production bases. Its current total technical capacity is about 40,000t/a, with several series products of mancozeb, chlorothalonil, cymoxanil, propineb, fosetyl-Al, metam-sodium, pyrimethanil, etc. Its 20,000t/a mancozeb technical capacity is the largest in Asia.
Source: Crop Protection China News 1110
Content of Crop Protection China News 1110:
Jiangsu Limin’s IPO application denied
Nanjing Redsun: Q1 net profit slips despite government support
Jiukang Bio-tech lauches toosedarin insecticide field demonstration
Zibo Wanchang may face delisting
Noposion to raise USD30.77 million
Zhejiang Wynca to further expand organosilicon capacity
Power shortage impacts domestic pesticide industry
Hubei suffers disastrous drought
Pesticide prices face two situations in China
Crop Protection China News, a semimonthly publication issued by CCM International on 15th and 30th(31th) of every month, aims to gain a deep insight into Chinese market, supply the latest market data and strategy support, analyze the newest legislation and policy and grasp the future market trend.
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