More Chemrez shares listed today

By Honey Madrilejos-Reyes
Reporter

CHEMREZ Technologies Inc., Asia-Pacific’s biggest producer of premium coco-biodiesel, will resume trading today simultaneous with the listing of additional shares, which earned the company P1.5 billion in proceeds.
           
The company sold last month 340.91 million new shares at P4.40 per share, equivalent to 24.4 percent of its outstanding capital. Stockbrokers said the offering was at least four times oversubscribed due to strong demand from foreign and domestic investors.
           
Mike Lecaros of Citiseconline.com said investors see Chemrez Tech as a “sexy” stock given its bright earnings prospects with the passage of the Biofuel Bill by both Houses of Congress.
           
The offer price is equivalent to 11.5 times its earnings per share for 2007 and translates to a 12.58-percent discount to the weighted average price of Chemrez Tech shares for the last 10 trading days.
           
He noted the discount to market average was the biggest discount so far to be offered by firms that recently sold shares to the public, whether maiden offerings or additional stock sales.
           
For his part, PCCI Securities president Francisco Liboro said P5.20 is an easy target for the firm on listing day, since that was the last closing price when trading on the stock was suspended prior to the public offer.
           
He noted the listing is well timed due to the imminent enactment of the Biofuel Bill, and just when the market is rebounding from its steep fall last week.
           
Ron Rodrigo, equities research head of Unicapital Inc., supported Liboro’s observation saying that Chemrez Tech has a “first-mover” advantage that will ensure it strong revenue and income growth once the bill is signed into law by the President and formally implemented.
           
Rodrigo said the bigger free float of the Chemrez Tech’s shares after the offering, from just 7 percent to more than 30 percent on listing day, will allow the stock to realize its real value in the market.
           
He valued the Chemrez Tech shares at P5.50 based on 2007 price earnings (PE) ratio of 14.74 times, and at P6.00 to P6.60 based on the 2008 PE.