SYDNEY, Oct. 10, 2017 /PRNewswire/ -- Chinese companies continue to show great interest in Australian Securities Exchange with Zhaoqing Piston Machinery Ltd listing on ASX in the coming weeks. Its sights are firmly set on securing its place in the manufacture of cast iron products for the automotive industry while securing its strong position in the household air-conditioner compressor component market.
Piston Machinery has established 15% market share in household air-conditioner compressor component market with global leading brands GMCC, Panasonic, Gree, Midea, and Highly-Hitachi among its customers. Piston now is looking at the largest cast iron segment -- automotive. Cast iron products going into automotive manufacturing represent 28% of total cast iron output in China.
Mr Jia Pingfan, CEO of Piston Machinery says, 'Automotive manufacturing is more technologically competitive and profitable and we are very conscious of technological innovation. Collaborating with customers, we are experienced in developing new products and we have begun conversations with a number of vehicle manufacturers. With our new investment, we are confident that we can build a strong foothold in that sector.'
China's cast iron industry is shifting from quantity driven to value-added quality driven under the government's recent initiative to reduce excessive cast iron capacity which has seen smaller, inferior iron foundries forced out of the market. Piston was among the first foundries to be certified to continue manufacturing under the new national environmental and technical standards. Piston has also been accredited as a New and High Technology Enterprise by the Chinese government which enables the company to receive preferential tax rates.
Interested in sophisticated Australian research and development capability, Piston has entered a Memorandum of Understanding (MOU) with University of New South Wales on precision manufacturing of heavy equipment and machinery.
The past 3 years (2014 - 2016) has seen Piston's revenue growing at a CAGR of 5.84% reaching $53.4 million in 2016, its gross profitability staying above 20% and its EBIT at 10.3%, 12.6%, and 12.9% over the consecutive years.
More than 50% of the IPO proceeds will fund new manufacturing capacity in the form of a shell type production line and Japanese Sinto line, setting up new facilities. Approximately 10% will support R&D and working capital, respectively.
The share is expected to trade on ASX on 28 November 2017. The IPO price is A$0.40 per share with the number of shares on offer between 37 and 50 million.
About Zhaoqing Piston Machinery
Piston Machinery was established in 2007 and quickly rose to holding 15% market share in household air-conditioner compressor component market with global leading brands GMCC, Panasonic, Gree, Midea, and Highly-Hitachi among its customers. Piston plans to enter automotive cast iron parts manufacturing to further its business growth.
Piston's Prospectus was lodged with ASIC on the 5th September 2017. AGC Capital is acting as Lead Manager of the offering. A registration statement, including a Prospectus, relating to these securities has been lodged and approval obtained from the Australian Securities and Investment Commission.
The IPO opened on 12 September 2017 through a prospectus issued by Piston Machinery. Closing date of the offering is set at 10 November 2017. The share is expected to trade on ASX on 28 November 2017.
Zhaoqing Piston Machinery: http://au.zqpst.com/en_intro/
Prospectus Availability:
The Offer is being made by the Company pursuant to the Piston Prospectus dated 5 September 2017. Anyone considering participating in the Offer should read the Prospectus in full and will need to complete an application form which accompanies the Prospectus.
The Prospectus is available in electronic form on the Company's website: http://au.zqpst.com/prospectusur.pdf
