Mando China’s IPO to help it expand market share
May 30, 2013 Category Automotive, Automotive Metals & Minerals
South Korean car parts maker Mando China’s initial public offering (IPO) in Hong Kong may help it expand market share. Hyundai and Kia were the source of about half of Mando China’s revenue last year; with fast-growing brands like General Motors and Geely providing the rest. Mando China – a spin-off from Mando Korea, which has been part of the Hyundai Group since 1980 – said in a 361-page document that it was gaining new orders from Volvo, BYD, Guangzhou Automotive Corp and FAW-Volkswagen. “If you want to know whether a stock is worth investing in, the company’s ability to source new clients is one crucial factor to consider,” said John Lu, Car Industry Analyst at Guosen Securities. Sources said the company aimed to raise up to USD350 million to fund two new production plants in Sichuan and Guangdong. Mando’s shares will start listing on May 31. Mando China’s financial performance this year has been called into question, however. A 50% income tax waiver for two of its subsidiaries, Mando Harbin and Mando Tianjin, was not renewed after the concession expired last year. The group’s other major subsidiary, Mando Beijing Chassis, which still enjoys a 15% waiver on income tax, will lose the tax break when the waiver expires in October next year. The company’s net profit rose 28% year-on-year to CNY155 million in the first quarter of this year. Its net profit last year edged down 0.3% to CNY498 million, while the gross profit margin fell 1.6 percentage points last year to 21%, amid vigorous competition, the South China Morning Post reports. Mando China plans to boost production of conventional brake products – anti-lock brakes and electronic stability control systems – to 22.4 million units next year from 19.4 million this year. Production of suspension products, including shock absorbers, suspension struts and damper spring modules, will increase to 19.7 million units from 17.9 million units.
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