Ruinian International

Ruinian International

Postby winston » Mon Feb 08, 2010 7:12 am

Nutritional products maker targets healthy $1.1b by Beth Ye, The Standard HK

Mainland health-food provider Ruinian International may raise as much as HK$1.13 billion from its initial public offering to strengthen its position as the largest supplier of amino acid-based nutritional products.

The company plans to issue 300 million shares at HK$2.95 to HK$3.78 apiece - 90 percent for its institutional tranche and 10 percent for retail investors. The offering comprises 250 million new shares and 50 million existing shares sold by shareholders. The minimum entry fee is HK$3,818.14 for a board lot of 1,000 shares.

CK Life Sciences International (Holdings), a biotechnology firm controlled by tycoon Li Ka-shing that originally invested HK$150 million in Ruinian in 2007, will sell 17.22 million shares. After the share sale and offering, CK Life's stake will be reduced to 9.32 percent.

Ruinian had an average annual turnover growth of 79.3 percent between 2006 and 2008. Chief financial officer Philip Poon Yick- pang said net profit last year is estimated to have grown 6.3 percent to about 200 million yuan (HK$227.6 million).

Templeton Emerging Markets Group has acquired a 5.03 percent stake in Ruinian.

It mostly produces nutritional and pharmaceutical items and has the largest market share - 21.6 percent - of amino aid-based products in the mainland. Its public offering starts today and will close on Thursday. Its stock market debut is set for February 19.


http://www.thestandard.com.hk/news_deta ... 00208&fc=1
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Re: Ruinian International IPO

Postby winston » Tue Feb 09, 2010 8:33 am

Ruinian off to robust start as it taps market for $1b

The international tranche of mainland health- food maker Ruinian International's IPO was fully covered when it opened its roadshow yesterday to tap the market for as much as HK$1.13 billion.

Cheung Kong (Holdings) (0001) deputy managing director Edmond Ip Tak-chuen declined to comment on links between Ruinian and CK Life Sciences International (0775), the conglomerate's health-care arm. Li Ka-shing-controlled CK Life will hold a 9.32 percent stake in Ruinian.

Other shareholders include Singapore's sovereign wealth fund GIC and Templeton.

Margin financing orders for Ruinian shares came up to HK$54 million - accounting for 48 percent of the retail tranche - according to four brokerages.

Source: The Standard HK
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Re: Ruinian International IPO

Postby winston » Tue Feb 09, 2010 12:56 pm

From Phillips:-

Valuation

The amino acid market in China is still at the early stage, we see Ruinian a high-risk stock. Ruinian's revenue may not grow along with the amino acid market in the short run and its profit margin may drop further if sales of its high margin products decrease.

As Ruinian has the largest amino acid market share among all providers in China, we set the target 2010E P/E at 13x, which is higher than the average 2010E P/E of its peers. We estimated Ruinian's 2010E EPS will be HK$0.274, we believe its herbal tea business can grow strongly. Our 12-month target price is HK$3.56.


Key Risk
-Drop in sales of branded products
-Change in government regulation that adversely affect Ruinian's business
-Lose market shares
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