The IPO Buzz: Almost Two Dozen Deals

As of Friday’s close, Wall Street’s bankers had priced 222 IPOs this year, according to the U.S. Securities and Exchange Commission’s filings. This includes unit offerings, but excludes closed-end funds, investment companies, bank conversions and foreign companies offering their shares in the form as American Depositary Shares in the United States for the first time. Those deals are secondary offerings as their underlying shares had been trading on their national stock exchanges.
That makes 2007’s average monthly IPO traffic 22 deals.
Revisiting Decades Past
That’s less than half the average monthly traffic in the 1990s: 47 deals per month. From January 1990 through December 1999, bankers priced 5,681 IPOs.
The busiest month in the 1990s was October 1996 with 109 deals.
The previous decade –- the 1980s — was a little slower. The average monthly traffic was 32 deals per month. From January 1980 through December 1989, bankers priced 3,845 IPOs.
The busiest month in the 1980s was June 1986 with 95 deals.
And the busiest month in 2007 was May with 35 deals.
Figures show we still have a long way to go from “the good old days.”
Chinese Trio
But this week’s traffic of 22 offerings could make it the busiest since the week of February 5. It produced 15 deals.
And three deals on the new-issues calendar are rumored to be on the “most wanted” list. Not surprisingly, they are from the Pacific Basin as the Chinese IPO drumbeat continues.
The IPOs are Agria (NYSE: GRO proposed), AirMedia Group (AMCN proposed) and China Nepstar Chain Drugstore (NYSE: NPD proposed).
Baa, Baa, Black Sheep
Agria is an agri-solutions provider engaged in the research and development, production and sale of agricultural products in China. The company offers frozen sheep semen, sheep embryos and breeder sheep, as well as corn seeds and seedling products. Its corn seeds include proprietary varieties designed to thrive in various climates. Its seedlings include blackberry, raspberry, date and white bark pine seedlings sold to plantation nurseries.
Agria reflects growing revenues and net income. For the year ended Dec. 31, 2006, Agria reported revenues of RMB489.7 million (US$64 million) in 2006 — more than triple the revenues of RMB152.3 million reported two years ago for 2004. And its net income has soared to RMB253.9 million (US$33.4 million) in 2006 — more than four times the net income of RMB57.8 million in 2004.
Reaching China’s Road Warriors
AirMedia believes it is the largest digital media network in China dedicated to air-travel advertising. The company operates over 95 percent of the digital TV screens that display ads in the 15 largest airports in China.
For the six months ended June 30, 2007, AirMedia reported almost as much revenue (US$16.7 million) and net income (US$4 million) as it did for all of last year. For the year ended Dec. 31, 2006, AirMedia reported total revenues of $US18.9 million and net income of US$4.1 million.
That’s all well and good. But here’s what has piqued interest in this IPO.
It is the 2005 IPO of Focus Media Holdings (Nasdaq: FMCN), a provider of advertising that is displayed on flat-panel television screens in a variety of locations in China.
On July, 12, 2005, Focus Media priced its IPO of 10.1 million shares at $8.50 each (adjusted for a two-for-one stock split in April 2007). On Friday, Nov. 2, Focus Media closed at $65 – UP a whopping 665 percent from its initial offering price.
A Chinese Walgreen’s?
China Nepstar believes it is the largest retail drugstore chain in China. The company operates about 1,791 drugstores located in 62 cities in China. (In the United States, Walgreen Co. is the No. 1 drugstore chain in terms of sales, although it has fewer stores than its closest rival CVS, according to Hoover’s.)
For the six months ended June 30, 2007, China Nepstar reported revenues of RMB946 million (US$124.3 million) — up 18.4 percent from RMB799.2 million for the same period a year ago.
For the six months ended June 30, 2007, China Nepstar reported net income of RMB43.3 million (US$5.7 million) – reflecting its swing to a profit from a loss of RMB11.6 million from the same period a year ago.
All in all, there are 22 stories from this week’s IPO calendar –- only three are summarized above.