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Colibri Technologies Goes Public in Shenzhen, Hits Price Ceiling in First Day
COVID-19 and China
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Colibri Technologies (002957:SZ) saw its share price hopping over the +44% bar, set by the Shenzhen bourse as a first-day limit. It jumped from initial CNY 15.10 (USD 2.19) to CNY 21.74 (USD 3.16) on the first day of trading on the Shenzhen-based SME board.

While the Shanghai bourse is attracting edgy investors to just-emerged STAR board, its Pearl-River-Delta counterpart is carrying out successful IPOs (Read here about key differences between the two marketplaces). Today’s top pick – Shenzhen Colibri Technologies Co., Ltd. (深圳科瑞技术股份有限公司).

The company’s business is concentrated around three product lines: automated testing and assembly equipment, automated equipment accessories, precision machining tools and dies. Colibri’s expertise extends over various industry verticals, including communications, HDD, medicine, automotive and electronics. Its versatile R&D team is composed of mechanical, electrical, optics, software and automation engineers.

Colibri is striving to become a leading company in precision automation. The firm raised an undisclosed amount in Series-A funding, led by Legend Capital (君联资本), in October 2016 -- the only round of financing undertaken by Colibri to date. This "Straight-to-IPO" approach is among the distinctive features of the machinery industry.

The firm generated operating income of CNY 828.8 million (USD 120.5 million) in H1 2019, growing 17.17% from H1 2018. Gross profit climbed an extra 49.52% from CNY 80.39 million (USD 11.68 million) to CNY 120.2 million (USD 17.47 million) in the same period. This positive shift is closely connected with recent changes in the company’s downstream partners' structure: a bunch of new energy enterprises appeared on the stage this year.

According to the prospectus, before going public, the company had 17 shareholders holding 369 million shares. It sold another 41 million (only 4.1 million of which are issued offline) to primary investors in the IPO, raising CNY 619 million (USD 89.97 million). Later in the morning, the share price went through the roof, forcing the firm’s market cap up to CNY 8.9 billion (USD 1.29 billion).

Since established in 2004, the SME board is considered the 'barometer of the manufacturing sector in China.' With the recent changes in China’s financial scene, the Shanghai Stock Exchange STAR Market might seize this status.

ANALYST
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