Chinese diesel engine parts maker Changyuan Donggu plans to raise $129m in Shanghai IPO

IPO

Xiangyang Changyuan Donggu Industry Co Ltd, a Chinese diesel engine parts manufacturer and distributor, plans to raise 915 million yuan ($129 million) in an initial public offering (IPO) on the Main Board of the Shanghai Stock Exchange (SEE).

Backed by Chinese government-led venture capital firm Shenzhen Capital Group, the company is poised to issue an aggregate of 57.88 million shares at a price of 15.81 yuan ($2.23) apiece.

It kicked off the online roadshow for the IPO offering on Wednesday with a plan to offer almost 23.15 million shares for subscription among individual investors online, while the remaining 34.73 million shares will be available offline for institutional investors, according to updates on the board.

Established in December 2001, Changyuan Donggu focuses on the research and development, production and sale of diesel engine parts, such as diesel engine cylinder blocks, cylinder heads, flywheel shells, exhaust pipes, and gearboxes. The company is based in central China’s Xiangyang City, Hubei Province and has more than 1360 employees.

Its major clients include Chinese truck brand Dongfeng Trucks, China-based diesel engines maker SFH, and Beijing Foton Cummins Engine, a joint venture between New York-listed diesel engines maker Cummins Inc and Chinese vehicle manufacturer Foton Motor.

According to its prospectus, the company generated almost 1.16 billion yuan ($163 million) in revenues in 2019, up 8.9 per cent from about 1.07 billion yuan ($151 million) in 2018. Its net profit stood at 272 million yuan ($38 million) last year, compared to nearly 185 million yuan ($26 million) one year earlier.

After the IPO, the company founder and chairman Li Zuoyuan will remain as the largest shareholder with a 39.5 per cent stake. Chinese state-backed fund Xiangyang Innovation Investment will hold a 3.33 per cent stake, while Shenzhen Capital Group, which backed the firm’s Series A and B rounds between 2010 and 2011, will retain a 2 per cent stake.

Chuangyuan Donggu will use the proceeds to consolidate its manufacturing base while facilitating the construction of a research centre.

Apart from Shenzhen Capital Group, the company’s backers also include state-owned Hubei Provincial High Technology Industry Investment, RiseSun Enterprises Holdings Limited, Future Value Capital and Xiangshui Dongting Capital.

China-based First Capital Securities serves as the principal underwriter of the deal. The company will float shares under the symbol “603950.”

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.