Four Foreign IPOs: Giant Interactive, Scope Metals, Akela Pharma, CNinsure

There are four foreign companies due to go public in the U.S. this week: Giant Interactive Group (GA) a leading Chinese developer and operator of multiplayer online games; Scope Metals (SCPE) a leading distributor and supplier of finished and semi-finished metals products and engineered plastics products based in Israel; Akela Pharma (AKLA) a Canadian specialty drug manufacturer focused on pain therpeutics; and CNinsure (CISG), a Chinese independent insurance agency and brokerage company.

012Smile.Communications Ltd (SMLC), an Israeli telecom company, is also going public and was written about in a previous post.

All quotations are from the companies' most recent S-1 filings with links provided.

GIANT INTERACTIVE GROUP (GA)
Business Overview (from prospectus)

We are one of China’s leading online game developers and operators in terms of revenues, and our online game ZT Online was the most popular online game in China in 2006, according to a report published by International Data Corporation, or IDC, a leading market research firm. We focus on massively multiplayer online, or MMO, games that are played through networked game servers in which tens of thousands of players are able to simultaneously connect and interact.

Offering: 57.2 million shares at $12.00 - $14.00 per share. Net proceeds of approximately US$657 million will be used for general corporate purposes, including capital expenditures and funding possible future acquisitions.

Lead Underwriters: Merrill Lynch, UBS Investment Bank

Financial Highlights:

In the six months ended June 30, 2007, our total net revenues increased by RMB605.0 million, or 734.2%, to RMB687.4 million (US$90.3 million) from RMB82.4 million in the same period in 2006... Our cost of services in the six months ended June 30, 2007 increased by RMB57.8 million, or 656.9%, to RMB66.6 million (US$8.7 million) from RMB8.8 million in the same period in 2006... Our gross profit increased by RMB547.2 million, or 743.4%, from RMB73.6 million in the six months ended June 30, 2006 to RMB620.8 million (US$81.6 million) in the six months ended June 30, 2007... Our research and product development expenses in the six months ended June 30, 2007 increased by RMB3.2 million, or 94.1%, to RMB6.6 million (US$0.9 million) from RMB3.4 million in the same period in 2006... our net income increased by RMB468.7 million, or 1,075.0%, from RMB43.6 million in the six months ended June 30, 2006 to RMB512.3 million (US$67.3 million) in the same period in 2007.

Additional Resources:

• Company website
• Online road show
• AP: 'IPO Spotlight: Giant Interactive'
• Reuters: 'China's Giant Interactive launches $800 million IPO'
• Seeking Alpha:Giant Interactive IPO Will Be Huge

SCOPE METALS (SCPE)
Business Overview (from prospectus)

We are a leading distributor and supplier of finished and semi-finished metals products and engineered plastics products and a provider of logistical services to industrial manufacturers in Israel and throughout the Middle East, Turkey, Greece and Cyprus, with a growing international presence in the United States, Europe and China. We are a one-stop shop provider of a broad range of metals products, metals components and engineered plastics products, with an extensive inventory that includes over 60,000 off-the-shelf items. Our broad inventory selection, proprietary inventory tracking system and automated warehouses allow us to meet our customers’ needs and short lead times, with over 95% of our deliveries in Israel in 2006 and 2007 being made within 24 hours of receiving an order.

Offering: 3.8 million shares at $25.00 - $28.00 per share. Net proceeds of approximately $92.4 million will be used to support the organic growth of the business; to support international operations, which include operations in the United States, the Czech Republic and Romania, including the possible establishment of a new central site for the company's United States operations and, to a lesser extent, the remaining net proceeds will be used for acquisitions and investments in complementary businesses.

Lead Underwriters: UBS Investment Bank, CIBC World Markets

Financial Highlights:

Our revenues for the year ended December 31, 2006 were $233.8 million, as compared to $134.6 million for the year ended December 31, 2005, an increase of $99.3 million, or 73.8%... Our cost of goods sold for the year ended December 31, 2006 was $161.5 million, as compared to $94.7 million for the year ended December 31, 2005, an increase of $66.8 million, or 70.5%... Our general and administrative expenses for the year ended December 31, 2006 were $9.6 million, as compared to $6.1 million for the year ended December 31, 2005, an increase of $3.5 million, or 57.3%.

Additional Resources:

• Company website
• Online road show
• AP: 'Scope Metals discloses terms of IPO'
• Globes: 'Precious metal: Scope Metal passes NIS 1 billion sales threshold in 2006'

AKELA PHARMA (AKLA)
Business Overview (from prospectus)

We are an integrated product development company primarily focused on therapeutics for pain utilizing our proprietary drug delivery technologies. Our lead product candidate is Fentanyl TAIFUN®, a fentanyl formulation specifically designed to be delivered with our TAIFUN® Multi-Dose Inhaler. We are developing Fentanyl TAIFUN® as a rapid-acting inhaled opioid analgesic for treatment of break-through cancer pain. In June 2007, we entered into an exclusive license and development agreement with Janssen Pharmaceutica N.V. with respect to the continuing development and commercialization of Fentanyl TAIFUN®. We believe, based upon the results of our clinical trials to date, that our Fentanyl TAIFUN® product candidate, if approved by regulatory agencies, will deliver much faster onset of pain relief from break-through cancer pain at lower dosages than other non-injectable products currently indicated for break-through cancer pain.

Offering: 5.3 million shares at $6.00 - $8.00 per share. Net proceeds of approximately $34.0 million will be used to complete clinical trials, for development and commercialization of products, to fund additional capital equipment, for general corporate purposes and working capital.

Lead Underwriters: Lazard, Oppenheimer & Co.

Financial Highlights:

The Pharma segment loss for 2006 was $27.7 million compared to a loss of $17.1 million for 2005. The year-over-year increase in the net loss was due to a higher rate of spending on research and development, LRI Spin-off and related charges, fixed asset impairment charges and increased foreign exchange expenses as discussed below... R&D costs for the year ended 2006 of $13.4 million were 39% more than in 2005... During 2006, we incurred approximately $7.4 million ($4.0 million—2005) in third-party product candidate development costs, $6.7 million ($2.6 million—2005) or 90% (65%—2005) of which related directly to Fentanyl TAIFUN®.

Additional Resources:

• Company website
• Online road show
• AP: 'Akela Pharma Plans U.S. Public Offering'
• RTT News: 'Akela Pharma Reveals Phase IIb Data Showing Faster And Superior Pain Relief Provided By Fentanyl TAIFUN To Patients'

CNINSURE INC. (CISG)
Business Overview (from prospectus)

We are a leading independent insurance agency and brokerage company operating in China. With approximately 11,000 sales professionals and approximately 170 sales and service outlets operating in eight provinces as of September 30, 2007, our distribution network reaches some of China’s most economically developed regions and some of the most affluent cities in China, such as Beijing, Shanghai, Guangzhou and Shenzhen.

Offering: 11.6 million shares at $11.00 - $13.00 per share. Net proceeds of approximately US$101.7 million will be used to fund acquisitions and establishment of joint ventures in order to enter new geographical markets and further expand product and service offerings; to upgrade IT infrastructure, expand call centers, and to establish internet-based direct-sales operations.

Lead Underwriters: Morgan Stanley, William Blair

Financial Highlights:

Our total net revenues increased by 71.6% from RMB143.7 million in 2005 to RMB246.5 million (US$32.4 million) in 2006... Commissions and fees we incurred increased 102.4% from RMB65.8 million in 2005 to RMB133.1 million (US$17.5 million) in 2006... Our selling expenses increased by 104.2% from RMB5.5 million in 2005 to RMB11.3 million (US$1.5 million) in 2006 primarily due to rapid sales growth and expansion of our distribution network... We achieved income from operations of RMB50.1 million (US$6.6 million) in 2006, compared with a loss from operations of RMB6.5 million in 2005.

Additional Resources:

• Company website
• Online road show
• BloggingStocks: 'CNinsure - biggie Chinese insurance broker looks for an IPO'
• AP: 'CNinsure plans to raise $102M in IPO'

Comments

[User 109462]

Speaking of metals, Thompson Creek Metals is listing on the NYSE soon...any info for that IPO?