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Quechen Silicon Chemical’s IPO debut on Shanghai Stock Exchange

Quechen Silicon Chemical (605183) to start trading on the Shanghai Stock Exchange - Main Board today, at a public offering price of RMB 14.38 per share, raising RMB 700.6 mln. Its initial listing shares account for 12% of total outstanding shares. The company’s initial price-to-earning ratio (PE) stands at 22.99.

China Securities acted as the lead underwriter and sponsor for the IPO.

Earlier, Quechen Silicon Chemical said its IPO was 2,661 times oversubscribed. Since 2019 to date, A-shares IPOs achieved median oversubscription of 2,814 times and the highest at 9,194 times. We expect the IPO to hit limit of 44% increment in its first day of listing. For subsequent 30-day trading the performances can be obtained from our China IPO Weekly.

Quechen Silicon Chemical Co Ltd is a China-based company mainly engaged in the research, development, manufacturing and sales of precipitated silica. The Company also produces and sells sulfuric acid products. The Company's main products are precipitated silica, including silica for the rubber industry, silica for feed additives, and silica for other applications. Its products also include a small amount of sulfuric acid and other products. Its products are mainly used in special materials for rubber industrial tires and animal feed carriers in the field of health. The Company mainly conducts its businesses in the China market.

In financial year 2019, Quechen Silicon Chemical garnered a total revenue of RMB 1191.14 bln, up 1% YoY. In terms of net income, it achieved RMB 318 mln, down 0% YoY. Accordingly, return on equity (ROE) and return on asset (ROA) stood at 17.15% and 14.19% respectively, earning per share (EPS) of 0.74 RMB.

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