The market for Shanghai advanced semiconductor financing in Hong Kong expressed indifference

Shanghai advanced semiconductor sought by Hongkong initial public offering to raise HK $752 million, but from Monday on the first day of the subscription, retail investors have little interest. Brokerage said, Shanghai advanced semiconductor retail investors do not provide any margin financing, investors are no doubt the cold response.

Brokers pointed out that another reason is that the stock valuation is too high, Shanghai advanced semiconductor until last year is still a loss, but it is even higher than the valuation of the larger core of the international competition. Shanghai advanced semiconductor issued 406 million 700 thousand shares, the price range of the guidance of 1.36 - HK $1.85, equivalent to the book value of fiscal year 2005 - 1.56 times. SMIC closed at HK $1.14 on Monday, the book value of 0.87 times.

Shanghai advanced semiconductor plans to sell 407 million shares of H shares, part of the public offering today (day 27) began to accept the application for subscription, is expected this Thursday (30) deadline. Placing results and the issue price is expected to be announced next month, 6. Shares are expected to be listed on the main board in the second half of 7, each trading unit for the purchase of 2000 shares. The global issue by Goldman Sachs (Asia) and the Bank of China as a joint global coordinator, joint account manager, CO sponsor and co lead manager.

407 million H shares in 366 million H shares (including 329 million for international placing new H shares and 36 million 970 thousand shares of H shares for sale), the remaining 40 million 670 thousand new H shares in the Hongkong public offering, at HK $1.36 per share offer price to 1.85 yuan, the proportion will be adjusted according to the callback mechanism. Not over allotment, according to the price of 1.61 yuan per share calculation, the total amount of financing of $655 million. Net financing of 520 million yuan. Under the right of over allotment, the company can sell 61 million shares of H shares, accounting for the total number of shares issued by the global issue of approximately 15%.

Shanghai advanced semiconductor is expected net proceeds in about 272 million yuan for the repayment of the part of the company's outstanding debt, including three were $10 million, $15 million and $10 million, will expire this year and next year the cycle of working capital financing. In addition, the company plans to about 248 million yuan for capital expenditure of 8 inch chip production, including 54 million 200 thousand yuan to increase production flexibility and manufacturing qualified rate, and purchase new production facilities to shorten the production cycle; and an increase of about 194 million yuan per month overall capacity, by December of last year about 12 thousand pieces of chip, to the end of December next year is about 14 thousand chip. In the event that the full allotment option is exercised, the company will receive an additional net proceeds of approximately $84 million 800 thousand, which is intended to be used to repay other outstanding debts.

Liu Youhai, President of Shanghai advanced semiconductor, said the company last year, mainly due to loss of 5 inch chip orders, as well as investment in the production of 8 inch chip facilities. However, the company optimistic about the business performance this year, is expected by June this year at the end of the 6 months ended up to balance performance. With the recovery of the semiconductor industry, the market is expected this year, the semiconductor industry has 6% to 8% growth momentum. Last year the company took a year to complete the 8 inch chip production facilities, this year will not be a large number of funds, when the plant reaches a certain use rate can generate economies of scale, will enter the harvest period, with all kinds of positive factors, the company decided on at this time, hope that through the platform of Hongkong towards the world.

Analog chip plant two operating the company in Shanghai, the production of 5 inch chip, 6 inch and 8 inch chip chip, at the end of February this year for the two months, respectively, sold 39 thousand and 700 and 74 thousand and 500 pieces and 14 thousand and 600 pieces. The company at the end of December last year, a loss of 75 million 30 thousand yuan, net profit of 04 years and 03 years were 183 million yuan and 133 million yuan.