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Shandong Yimeng Bearing Filing Singapore IPO
China Bearing (Singapore) Ltd. has filed for an initial public offering of shares (IPO) on the Singapore Exchange (website). For reference, the company is essentially a repackaged version of Shandong Yimeng Bearing Co. Ltd. (China), which has been operating since 1988.
China Bearing (Singapore) Ltd. prospectus
272 pages : PDF format
Founded just a year ago, on August 31, 2005, China Bearing (Singapore) Ltd. is a holding company. Its operating arm is Linyi Kaiyuan Bearing (China), founded in late 2005. Linyi Kaiyuan had no actual bearing manufacturing operations until April 2006 when it acquired Shandong Yimeng Bearing Co. Ltd. (China).
The largest shareholder in China Bearing (Singapore) Ltd. is China Bearing (Bermuda) Ltd., which is 54% owned by Mr. Zhang Yuankai. The name for Linyi Kaiyuan Bearing comes from reversing the names of Mr. Yuankai and his son. Together, Mr. Yuankai, his son, and son-in-law, own 86% of China Bearing (Bermuda) Ltd. Mr. Yuankai was owner and CEO of Shandong Yimeng Bearing Co. Ltd.
The company's facilities are located in Shandong Province, China, with production floorspace covering almost 42,000 square meters (452,000 square feet). With production employing 584 full-time and 286 temporary workers, annual capacity is almost 17 million bearing sets.
Linyi Kaiyuan continues Shandong Yimeng's production of ball bearings, tapered roller bearings, thrust ball bearings, cylindrical roller bearings and annular roller bearings for automotive, industrial and agricultural applications. The company divides its offerings in three descriptive groups:
The first group is "micro-size" bearings for light commercial vehicles and recently accounted for just 2% of sales, down from 11% of sales in fiscal 2003.
The second group is "light bearings" for medium-duty commercial and agricultural applications. They accounted for 30% of recent sales, down from 46% of sales in 2003.
The third group is "heavy bearings" for heavy-duty (10+ ton) truck and industrial applications. This group accounted for 65% of recent sales, up from 17% in 2003.
China Bearing currently sells its bearings almost exclusively in China, although it recently began pursuing export market interest in the Ukraine and United Arab Emirates.
The Shandong plant currently runs 24 / 7 / 351 at just over 71% capacity utilization, or 9.4 million sets per year. Until several months ago, it had been capacity constrained, running at 95% capacity, due to a heat treat facility bottleneck. Adding a new heat treat line has freed up capacity and utilization dropped to 71% even though output has since surged 25%.
For several product lines, key components are sourced from Gundong Bearing (China). In all, Gundong supplies more than a third of Linyi Kaiyuan's raw and semi-finished components by value.
Boldly illustrating the cost advantages of manufacturing in China, the IPO prospectus lists the costs of producing a bearing as:
• 83% raw material • 8% labor • 9% general overhead
A major portion of the IPO proceeds will be used to build out a second, 55,000 square meter (592,000 square feet) facility in Shandong Province. The second plant will be dedicated to manufacturing bearings for heavy-duty vehicles and passenger cars.
Other IPO proceeds reportedly will be used to hire more professional R&D staff, build up its R&D facilities, extend product line offerings and finance a move into more export markets, particularly in Southeast Asia. Currently, R&D is largely performed under the control of Luoyang Research Institute, which designs the bearings.
All of the facilities will apparently be operated under the holding company's operating subsidiary name, Linyi Kaiyuan Bearing.
Details of Singapore exchange traded companies are maintained as public record by the Monetary Authority of Singapore (MAS) on the Offers and Prospectuses Electronic Repository and Access (OPERA) database at:
http://masnet.mas.gov.sg/opera/sdrprosp.nsf
The offering is being placed and underwritten by Singapore-based Phillip Securities Pte. Ltd.
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| H241/600HG bearing | 600 | ||
| H32/600HG bearing | 600 |