China's Zhejiang Supor Cookware opens flat in Shenzhen debut

AFX , Lake Xu
Published August 16, 2004

Zhejiang Supor Cookware Co Ltd (SZA 002032) opened at 12.21 yuan on its trading debut on the Shenzhen second board, unchanged from its initial public offering price of 12.21. The opening price was far lower than broker estimates of between 14 and 15 yuan. The company issued 34 mln A-shares on Aug 3 to raise net proceeds of 394.09 mln yuan to fund five technical upgrading projects and set up an international sales network. The offer price of 12.21 yuan reflected a price to earnings ratio of 16.19 based on its fully-diluted 2003 earnings per share. The company posted a net profit of 76.47 mln yuan in 2003, up from 51.29 mln in 2002 and 24.37 mln in 2001. Zhejiang Supor warned investors of possible cancellation of preferential taxes and subsidies, which totaled 32.48 mln yuan last year, accounting for 42.48 pct of its 2003 net profit. The firm said other risks include a possible negative impact on its sales because of safety concerns over Teflon, the non-stick coating used on frying pan surfaces. Zhejiang Supor said sales of products using Teflon accounted for 7.44 pct of its total revenue last year. The US Environmental Protection Agency (EPA) announced last month that it would fine DuPont E I Nemours & Co for failing to report test results relating to the synthetic chemical perfluorooctanoic acid (PFOA), the main ingredient in Teflon, which is suspected of causing health problems. But DuPont later rejected the EPA's allegations, saying it has fully complied with statutory reporting requirements and disputes any association between perfluorooctanoic acid and harmful health effects, insisting PFOA is not hazardous to human health. (1 usd = 8.3 yuan)