Dominant Chinese SteelCord maker plans IPO this month - report

Hong Kong -- The Standard newspaper is reporting that Jiangsu-based Xingda Steel Tyre Cord Group is planning an Initial Public Offering (IPO) on the Hong Kong stock exchange before the Chinese Spring Holiday at end of this month. The IPO is valued at around Euro 83 million

The company was established in 1988 and is based in the Southeast of Jiangsu Xinghua Economic-Technological Development Area in Dainan town, Xinghua city. The company produced around 100 000 tonnes of steelcord in 2004, worth RMB 1700 million (Euro 175 million). This represents around 42 percent of all domestic Chinese production. The company employs around 4500 people, of whom 500 are engineering technicians, said the company in a statement.

The report quotes local consultants, Business Development Asia saying "Original equipment manufacturers in China make around 15 percent gross margin, but that is expected to tighten due to cost pressures and better bargaining positions, while the replacement market can generate as much as 25 percent gross margin." BDA added, "China's tire industry is still highly fragmented with over 450 manufacturers that generated about US$9.8 billion (HK$76.4 billion) in sales in 2004"

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Company profile of XingDa

US$100m IPO plan for tire cord maker The Standard (Hong Kong)

China's Xingda Steel Plans US$100 Mln HK IPO Yahoo! (Hong Kong)