Sinopec Engineering

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A) Brief background of the company Sinopec Engineering (Group) Co.Ltd. (SINOPEC) was established on 3rd September 2012 which is a wholly-owned subsidiary of the Sinopec Group which focuses on providing integrated engineering services and technical patents for domestic and overseas refining and chemical engineering market. However, the group is 67%-owned subsidiary of the Sinopec Group after its IPO on 23rd May 2013. SINOPEC owns many qualifications certificated by the national government departments and international authoritative institutions such as National Development and Reform Commission. SEG has the largest market share in China’s oil-refining and petrochemical industry owned by SEG based on revenue in 2011. Sinopec Engineering (Group) …show more content…

plans to offer shares in a price range of 9 to 12 time of 2013 forecast earnings in a Hong Kong initial public offering which could raise around $2 billion. Hong Kong is one of the nation until 2011 the world's top venue for IPOs, had been attempting to attract new listings, after several new listings failed to meet expectations last year. But strong demand for the IPO of Sinopec Engineering, whose deal was several times oversubscribed. Sinopec Engineering (Group) Co Ltd initially offered the shares at price in the middle of HK$9.80 and HK$13.10 for a deal size of $1.7billion to $2.2billion. At the same time, on the final day of the book building, bankers told investors that the price would be fixed below the mid-point, in a narrower range in the middle of HK$10.50 and HK$11. Finally, the offer cost was settled at HK$10.50 every share. Based on the data above, we can see that the opening share cost of IPO Sinopec Engineering Co Ltd from HK$10.5 to HK$10.7. Finally, the offer price was fixed at HK$10.50 per …show more content…

Although solid connections to its parent may mean stable sales, analysts said that limits growth opportunities. On the other hand, an American Financier J.P. Morgan said that, "Sinopec Engineering's increasing penetration in overseas markets should emerge as a new source of growth in coming years," This indicate that Sinopec Engineering Co Ltd have potential to growth in the nearing years. The successful listing of Sinopec would be welcome news for different firms looking to tap Hong Kong's IPO market later on. III) COMPARISON WITH OTHER SIMILAR RECENT EXERCISES In this section, we compare our listing with another similar company, which is Wison Engineering Services Co. Ltd where both companies operate in the same backdrop, the oil and gas (O&G) sector. Interestingly, Wison Engineering Services Co. Ltd is also listed in the Hong Kong Stock Exchange, albeit months earlier on 28th December 2012. Companies Method of fundraising Initial public offering (IPO) Initial public offering (IPO) Listing exchange Hong Kong Main Board Hong Kong Main Board Price range (HK$) 10.50 – 11.00 2.79 – 3.53 IPO price (HK$) 10.50

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