KUALA LUMPUR: China Stationery Ltd (CSL), the integrated plastic stationery maker which will soon debut on Bursa Malaysia, says it has no worries about the lacklustre performance of other China-based companies listed on the local bourse.
CSL, based in Futian in Fujian province, will launch its prospectus today. The company is valued at about RM1.2 billion for its initial public offering (IPO), potentially making it the most valuable China-based company on the bourse if its share price does not fall after listing.
Xingquan International Sports Holdings Ltd is the largest so far with a market capitalisation of RM275.06 million as at yesterday.
During a media interview yesterday, CSL chairman Chan Fung said, “We have 20 years of experience in the stationery industry. We are confident that we can do our best to maintain and increase the share price [upon listing].”
The seven China-based companies in Malaysia, five of which are shoe manufacturers, have suffered from a negative perception among investors. Their stock prices have experienced sharp declines since their listings. Although most have registered double digit earnings growth and offered good dividends, many are trading below their book values and even net cash per share.
CSL is involved in designing, manufacturing and the sale of more than 450 plastic filing and document storage products under its own brands. It has the largest market share for stationery files in China, according to its management.
In order to entice investors, Chan said CSL has set a dividend policy of not less than 20% of its net profit from FY11 ended December onwards.
Note that in FY10, the company registered a profit after tax of 397.63 million yuan (RM192.54 million) on the back of 1.41 billion yuan in revenue. For the seven months to July 31, 2011, it recorded profit after tax of 228.39 million yuan on revenue of 972.72 million yuan.
Chan said CSL’s house brand products are marketed in China and in over 45 countries. As at July 2011, it had 300 distributors worldwide, of which 14 are exclusive distributors.
In FY10, Asia (excluding China) contributed the largest share of revenue to CSL at 33%, followed by China (28%), Americas (16%), Europe (16%) and other countries (7%).
From 2008 to 2010, CSL’s three year compound annual growth rate (CAGR) for revenue was 17.98%, and it has sustained a gross profit margin of more than 45% since FY08.
Chan is confident the company will continue to post handsome growth, saying the global plastic stationery industry is expected to expand at a CAGR of 5.3% from 2010 to 2014, according to Frost & Sullivan. Chan said the company has not been affected by the eurozone debt crisis, and has actually received strong interest from new customers from the region.
CSL is planning to set up a manufacturing plant in Malaysia and the products made here will be for the Asean and Middle East markets. Its existing manufacturing plant is located in Fujian province in China.
Post-listing, Chan said the company’s plans include expanding its sales network, investing in more research and development (R&D) to design more innovative and high margin products, and increasing its production capacity.
According to Chan, he and two other individuals will hold about 74.7% of CSL post listing. The other single largest investor is Lembaga Tabung Haji which will have a post-IPO stake of 2.23%.
On why the company has chosen to list on Bursa, Chan explained that CSL was actually approved to list on the Singapore Exchange in 2008 but withdrew because market conditions were bad during the global financial crisis. Subsequently, Bursa began promoting foreign listings in Malaysia and with Lembaga Tabung Haji investing in CSL in July 2009, the company then decided to list in Malaysia.
CSL will issue 90 million new shares, of which 60 million will be made available to the public via balloting. The remaining 30 million shares are earmarked for private placement.
CSL is expecting to raise RM85.5 million from the IPO. The bulk of the proceeds will be utilised for the purchase of new machinery and equipment as well as for R&D.
Chan said CSL will have an annualised price-earnings ratio of around six times based on its offer price, which will be announced in its prospectus today.
CSL’s adviser, underwriter and placement agent is M&A Sdn Bhd, while its auditor is Grant Thornton.
This article appeared in The Edge Financial Daily, January 31, 2012.
CSL, based in Futian in Fujian province, will launch its prospectus today. The company is valued at about RM1.2 billion for its initial public offering (IPO), potentially making it the most valuable China-based company on the bourse if its share price does not fall after listing.
Xingquan International Sports Holdings Ltd is the largest so far with a market capitalisation of RM275.06 million as at yesterday.
During a media interview yesterday, CSL chairman Chan Fung said, “We have 20 years of experience in the stationery industry. We are confident that we can do our best to maintain and increase the share price [upon listing].”
The seven China-based companies in Malaysia, five of which are shoe manufacturers, have suffered from a negative perception among investors. Their stock prices have experienced sharp declines since their listings. Although most have registered double digit earnings growth and offered good dividends, many are trading below their book values and even net cash per share.
CSL is involved in designing, manufacturing and the sale of more than 450 plastic filing and document storage products under its own brands. It has the largest market share for stationery files in China, according to its management.
Chan (centre), financial controller Ang Chun (right) and director Tan Choon Hwa with some of the company's products at yesterday's media briefing.
In order to entice investors, Chan said CSL has set a dividend policy of not less than 20% of its net profit from FY11 ended December onwards.
Note that in FY10, the company registered a profit after tax of 397.63 million yuan (RM192.54 million) on the back of 1.41 billion yuan in revenue. For the seven months to July 31, 2011, it recorded profit after tax of 228.39 million yuan on revenue of 972.72 million yuan.
Chan said CSL’s house brand products are marketed in China and in over 45 countries. As at July 2011, it had 300 distributors worldwide, of which 14 are exclusive distributors.
In FY10, Asia (excluding China) contributed the largest share of revenue to CSL at 33%, followed by China (28%), Americas (16%), Europe (16%) and other countries (7%).
From 2008 to 2010, CSL’s three year compound annual growth rate (CAGR) for revenue was 17.98%, and it has sustained a gross profit margin of more than 45% since FY08.
Chan is confident the company will continue to post handsome growth, saying the global plastic stationery industry is expected to expand at a CAGR of 5.3% from 2010 to 2014, according to Frost & Sullivan. Chan said the company has not been affected by the eurozone debt crisis, and has actually received strong interest from new customers from the region.
CSL is planning to set up a manufacturing plant in Malaysia and the products made here will be for the Asean and Middle East markets. Its existing manufacturing plant is located in Fujian province in China.
Post-listing, Chan said the company’s plans include expanding its sales network, investing in more research and development (R&D) to design more innovative and high margin products, and increasing its production capacity.
According to Chan, he and two other individuals will hold about 74.7% of CSL post listing. The other single largest investor is Lembaga Tabung Haji which will have a post-IPO stake of 2.23%.
On why the company has chosen to list on Bursa, Chan explained that CSL was actually approved to list on the Singapore Exchange in 2008 but withdrew because market conditions were bad during the global financial crisis. Subsequently, Bursa began promoting foreign listings in Malaysia and with Lembaga Tabung Haji investing in CSL in July 2009, the company then decided to list in Malaysia.
CSL will issue 90 million new shares, of which 60 million will be made available to the public via balloting. The remaining 30 million shares are earmarked for private placement.
CSL is expecting to raise RM85.5 million from the IPO. The bulk of the proceeds will be utilised for the purchase of new machinery and equipment as well as for R&D.
Chan said CSL will have an annualised price-earnings ratio of around six times based on its offer price, which will be announced in its prospectus today.
CSL’s adviser, underwriter and placement agent is M&A Sdn Bhd, while its auditor is Grant Thornton.
This article appeared in The Edge Financial Daily, January 31, 2012.
