AIO Finance Analysis

Closing date of application: 10 March 2008
Commencement of trading: 12 March 2008

Established in the 2003, Li Heng Chemical Fibre is principally engaged in the manufacture and sale of high-end nylon yarn products under their brand names "Liyuan" and "Liheng" in the PRC.

Their two production facilities in Changle City, Fujian Province, PRC, are strategically located amongst clusters of textile and garment manufacturing industries, which are their main customers, and related supporting service industries.Their revenue and profit have been registering 91.2% and 93.3% growth respectively over the past 3 years.


Financial figuresIntended IPO price: $0.80
No. of shares available for public offer: 10m
No. of shares available for placement offer: 390m
Total post invitation share capital: 1,700m
Dividend policy: No fixed policy.

Conclusion:
Based on its numbers, Li Heng is comparable to the leading SGX textile stocks such as Shina Sky, Fibrechem, and Sinotech Fibre, instead of the smaller companies such as C&G and Foreland.Li Heng should trade at a Fair Value of $1.30 or 12x PE only.

Probability of getting allotted for the IPO - FAIR
(Prospectus here...)
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Source: Extraordinary Profits