China Ming Yang Wind Power (MY), a China based manufacturer of megawatt-class wind turbines, priced its IPO on 30th September, 2010 at $14 per ADS below its estimated range of $16-$18, generating a first day return of -5.4%.
Business Overview (from prospectus)
We are a leading and fast-growing wind turbine manufacturer in China, focusing on designing, manufacturing, selling and servicing megawatt-class wind turbines. We were the largest non-state owned or controlled wind turbine manufacturer in China, as measured by installed capacity of wind turbines at the end of 2009, with a 4.1% market share in terms of newly installed capacity in 2009, according to BTM Consult ApS, or BTM, an independent consulting firm specializing in renewable energy. We were also among the five largest domestic branded wind turbine manufacturers in China as measured by newly installed capacity in 2009, according to BTM. Also according to BTM, China had advanced to first place in the world in terms of newly installed capacity of wind turbines, with 13,750 megawatts, or MW, in 2009, and second place in the world in terms of cumulative installed capacity, with 25,853MW by the end of 2009.
Offering: 25 million ADS at $14 per ADS. Net proceeds of approximately US$230 million will be used for the expansion of production capacity and approximately US$80 million for research and development.
Total revenue increased from RMB601.6 million for the six months ended June 30, 2009 to RMB2,318.6 million (US$341.9 million) for the same period in 2010...Cost of sales increased from RMB593.2 million for the six months ended June 30, 2009 to RMB1,862.8 million (US$274.7 million) for the same period in 2010...Gross profit for the six months ended June 30, 2009 and 2010 amounted to RMB8.4 million and RMB455.8 million (US$67.2 million), representing a gross margin of 1.4% and 19.7%, respectively... Research and development expenses increased by 84.1% from RMB12.6 million for the six months ended June 30, 2009 to RMB23.2 million (US$3.4 million) for the same period in 2010...Selling and distribution expenses increased by 90.6% from RMB28.8 million for the six months ended June 30, 2009 to RMB54.9 million (US$8.1 million) for the same period in 2010...Profit from operations was RMB339.3 million (US$50.0 million) for the six months ended June 30, 2010, representing an operating margin of 14.6%, as compared to a loss of RMB59.9 million for the six months ended June 30, 2009...Net profit of RMB300.5 million (US$44.3 million), representing a net profit margin of 13.0%, for the six months ended June 30, 2010 as compared to a net loss of RMB84.6 million for the same period in 2009...
The Chinese wind power equipment industry is intensely competitive, rapidly evolving and highly fragmented. We expect the competition to further intensify as new players enter the market including some of our customers. We currently compete with both domestic and international wind turbine manufacturers. Our major domestic competitors include Sinovel, Goldwind, Dongfang and United Power. Sinovel is the largest wind turbine manufacturer in the domestic market, responsible for approximately 20.4%, 22.5% and 25.1% of new wind turbine installation in 2007, 2008 and 2009, respectively, according to BTM. Our key international competitors in China include Vestas (VWDRY.PK) from Denmark, Gamesa Corporación Tecnológica S.A. (GCTAF.PK) from Spain and GE Energy, the alternative energy arm of GE (GE) from the United States.