The Straits Times Index (STI) fell below the important psychological support of 3,000 to end at 2,980 on Friday, the 13th. China Taisan which debuted at $0.24 on the same day managed to stay afloat at $0.25 on June 16. STI managed to climb 62 points to 3,041 as at noon of June 16.

Not exactly the best of times to be listing new shares. Companies that decide to stop holding and go on ahead with their listing plans would be more concerned with raising their company’s profile rather than seeing their share prices shoot up like rockets upon their debut which seems like an ancient history relic phenomenon which is unlikely to ever happen again in the near to mid-term.

Based in Dongguan, an important industrial city in the Pearl River Delta, Combine Will International Holdings (CW) manufactures plastic and die-cast products. CW launched its IPO of 88m new shares at $0.23 each for a mainboard listing on the SGX.

83m of the shares are placement shares, with only 5m available for public subscription. The shares represent 26.8% of CW’s enlarged share capital of 328m shares. At $0.23 each, the offer is priced at a ratio of 10.1 times FY06 earnings, based on the pre-offer share capital of 240m shares.

SERVING PROMINENT CAR MAKERS

As a leading producer of plastic injection and die-casting moulds in southern China, with six plants in Dongguan and Heyuan in Guangdong Province, CW supplies car makers such as Honda, Volvo and General Motors, as well as auto parts makers such as Valeo, Delphi and Faurecia. The company is also planning to move into the production of auto parts itself.

CW plans to use the $16.3m IPO net proceeds on: i) acquring plant, machinery and production facilities for expanding its business ($4m), ii) research and development ($2m), iii) expanding its sales and marketing network ($1m), expanding manufacturing facilities to produce auto parts ($4m) and working capital (balance).

RELIABLE TRACK RECORD

The company’s chairman Dominic Tam said, “Our ODM/OEM business segment continues to benefit from the increasing outsourcing trend of multinational companies in China.”

Tam added, “These MNCs focus on quality and safety, choosing to work with manufacturers who have an established track record and are socially responsible. They also prefer a manufacturing partner with integrated capabilities and functions. As such, our capabilities in design, engineering, production of moulds and tooling, plastic-injection and die-casting put us in an advantageous position.”

In 2006, CW’s ODM/OEM business accounted for 58% of its total revenue, while moulds and tooling accounted for 27%. Machine sales made up the remaining 15 per cent.

In the first 9 months of FY07, CW registered revenue of HK$867.7m, up from HK$695.1m previously, and a net profit of HK$64.7m, up from HK$29.6m previously.

CW is expected to begin trading on June 23.