Company Finally Opens its Doors to Trading
Foshan Haitian Flavoring and Food Company is starting to trade its shares on the Shanghai Stock Exchange after a major domestic seasonings producers have raised more than 3 billion yuan which is dubbed the second largest initial public offering in the country after the Freeze on IPOs was lifted. Based on a filing on the Shanghai bourse, Foshan Haitian is the largest flavoring producer based on output has listed 74.85 million shares on the stock exchange.
China’s security regulators have lifted the freeze on IPOs last December after doing overhauls that was aimed to make the IPO system in the country more market oriented by giving more freedom to the issuers in deciding the pricing and timing of their public offerings. So far more than 50 companies were allowed to list their shares and among these companies is Shaanxi Coal Industry Co. which topped that list of the amount raised as the company offered 4 billion yuan in offerings.
In November 2012 China closed its doors to IPOs as part of the government effort in boosting confidence among investors that have seen stock prices slide down for years. the freeze gave regulators time to overhaul the market as new deals were highly over priced in the primary market and was slowly declining. Foshan Haitian sold 10 percent of its capital or 74.85 million shares at 51.25 per share.
Analysts say that the company’s IPO price is 31.90 times its 2012 earning which is 34 percent below the average price to earnings ratio among listed comparable peers. The company has also raised funds by selling 37.50 million new shares and 37.35 million existing shares to new investors that raised 1.91 billion yuan.
The company reported a net profit for the first nine months of 2013 which was up 37 percent or 1.2 billion yuan compared to a year earlier.