Ossen Innovation (NASDAQ:OSN), a China-based manufacturer of rare earth metals coated steel materials, is expected to price its IPO this week.
Business Overview (from prospectus)
We manufacture and sell an array of plain surface prestressed steel materials and rare earth coated and zinc coated prestressed steel materials, which we believe is the most comprehensive array among our competitors in China. Our materials are used in the construction of bridges, highways and other infrastructure projects in the PRC and internationally. Our facilities are located in Maanshan City, Anhui Province and in Jiujiang City, Jiangxi Province, in the People’s Republic of China. According to a report issued by the Institute of Quantitative and Technical Economics, Chinese Academy of Social Sciences, or the CASS report, dated October 8, 2010, we were among the top five prestressed concrete, or PC, material producers in the PRC as measured by annual output from 2006 through 2008. According to the PRC PC Strand Industry Investment and Market Operation Research Report, in 2008, our products were ranked third in sales in the PRC for PC strands and wires, and ranked first in export sales of these materials by Chinese prestressed steel manufacturers. Historically, we and our customers have had a greater than 90% success rate with respect to winning projects on which either we or our customers have bid. Based on our extensive experience in the industry, we believe that Ossen is one of the leading enterprises in the PRC in the design, engineering, manufacture and sale of customized prestressed steel materials used in the construction of bridges, highways, and other infrastructure projects in China.
Offering: 5 million ADS at $5 - $6 per ADS. Net proceeds of approximately $2 million will be used for the construction costs of Maanshan facility and approximately $20 million toward the purchase and installation of eight new production lines.
Lead Underwriters: Global Hunter Securities, Knight Capital Markets (NYSE:KCG)
Revenue was approximately $58.7 million during the six months ended June 30, 2010, as compared to revenues of approximately $40.4 million during the six months ended June 30, 2009...Cost of goods sold was approximately $47.1 million during the six months ended June 30, 2010, as compared to approximately $35.7 million during the six months ended June 30, 2009... General and administrative expenses totaled approximately $0.5 million for the six months ended June 30, 2010, as compared to approximately $0.6 million for the six months ended June 30, 2009...operating income for the six months ended June 30, 2010 was approximately $10.9 million, an increase of 186.7% as compared to approximately $3.8 million for the same period in 2009...Net income totaled approximately $8.5 million for the six months ended June 30, 2010, as compared to approximately $2.8 million for the six months ended June 30, 2009...
Competition among manufacturers of plain surface steel products in China can be characterized as fragmented, with many large and small companies competing with each other. Our primary competitors for these products are Baosteel Group Shanghai Ergang Co. Ltd., Jiangyin Fasten Steel Products Co. Ltd., Jiangyin Walsin Steel Cable Co. Ltd and Shuangyou Eaststeel. Competition among PRC manufacturers of zinc coated prestressed products in China is limited to only four companies. Our main competitors for these products are Baosteel Group Shanghai Ergang Co. Ltd., Shuangyou Eaststeel and Jiangyin Walsin Steel Cable Co. Ltd. Furthermore, we believe that we are the only Chinese rare earth coated prestressed material manufacturer. While we believe that our rare earth coating capabilities provide us with a competitive advantage among our competitors, it is likely that our competitors will seek to develop similar competing products in the near future. We intend to continue to expend research and development efforts to advance our rare earth coating applications even further. However, there can be no assurance that our initial competitive advantage will be retained and that one or more competitors will not develop products that are equal or superior to ours in quality or are better priced than our rare earth coated products.
- Company website
- StreetInsider: Ossen Innovation (OSN) Lowers Price Range of Upcoming IPO
- WSJ: China's Ossen Innovation Cuts Size, Price Guidance For IPO