Prinx Chengshan Tire fell on debut

Prinx Chengshan (Cayman) Holding Limited fell on its first day of trading in HongKong on October 9.

The company issued its share price at 5.89 HongKong Dollars, and ending at 4.38 HongKong dollars yesterday, falling 25.64%.

Chinese tire maker Prinx Chengshan (Cayman) Holding debuted on the Hong Kong Stock Exchange (HKEX) on Oct. 9, offering 135 million shares subject to over-allotment option at a maximum price of 96 cents per share.

The company — the Cayman Islands holding for Prinx Chengshan (Shandong) Tire Co. Ltd. — filed the prospectus in April and its application was approved earlier September.

A majority of the raised capital is planned to fund its expansions, such as $43 million earmarked for new truck and bus tire capacity and $21 million for new passenger car tire capacity, according to the HKEX filing. Another $32 million will be pumped into possible acquisitions.

Prinx Chengshan — formerly Cooper Chengshan (Shandong) Tire Co. Ltd. — operates one plant in Roncheng City, Shandong, producing passenger, light truck, medium truck/bus, farm and OTR tires at a rate of 15 million units a year. The company has plans to add capacities of 2.6 million truck/bus tires and 10 million passenger tires per year.

It committed $10 million earlier this year to upgrade truck and bus tire production and expects it to start production in nearly 2019.

The company claims to be the China's fifth largest truck and bus tire maker. Its fiscal 2017 sales of $856 million puts the company 33rd on the Tire Business Global Top 75 tire makers rankings.

The company has considered building a plant in Malaysia, but that project now is being pursued by its parent company, Chengshan Group, the filing states.