China Taisan IPO

China Taisan Technology IPO comprises of
- 8,000,000 Offer Shares at S$0.24 each by way of public offer; and
- 225,000,000 Placement Shares at S$0.24 each by way of placement

China Taisan Technology Group Holdings Limited (”China Taisan”) is one of the leading manufacturers in the PRC of knitted fabrics used for sports and leisure apparel. Knitted fabrics are stretchable and mostly used in sports and leisure apparel.

They are approved suppliers of fabrics used in the manufacturing of apparel for reputable international and local sports and leisure apparel brands such as Umbro, Nike, Puma, Anta (安踏), Kappa, Lotto, Wanjielong(万杰隆) and E•Land.

Competitive strength
- approved suppliers for reputable international and local apparel brands
- strong R&D capabilities
- established track record and reputation
- experienced management team
- strategically located in Jinjiang City
- advanced technologies and equipment in our production process
- able to manufacture products that conform to various international standards

Risk
- may be affected by major disruptions and accidents at our production facility
- vulnerable to fluctuations in polyester yarn prices
- dependent on the protection of our proprietary technical know-how
- dependent on the apparel industry
- R&D efforts may not lead to successful development and/or commercialisation of new products
- lack of long-term purchase orders or commitments from customers could adversely affect our Group’s business if demand is reduced
- dependent on certain key personnel for our continued success

Facts

NAV after post invitation 927,900,000 shares : 10.75cts
Historical EPS for 704,700,000 Shares : 5.11cts
Historical PE : 4.69
EPS for 927,900,000 shares : 3.88cts
PE base on above : 6.19
Market capitalization base on offer price : 222.7 million

Base on market cap, it is bigger than C&G Industrial Holdings which is trading at PE of 3.6 and smaller than China Sky which trade at PE of 6.0. I can say 6.19 is not very expensive, but not cheap either compare to the peers. Business wise, they are not direct comparable, since China Taisan operate in performance fabric segment.

Textile and fiber stocks have not received favourable response on SGX. Unless you have long investment horizon, oil price increase would make you nervous.