IPO Filing: Gushan Environmental, Biodeiesel & In China (GU)

After yesterday’s close, there was quite an interesting IPO filing with the buzz that may ring in many ears: enter Gushan Environmental Energy Limited….. Gushan Environmental is biodiesel player for the alternative energy investors, and based in China for the China-investors.   

The nominal amount of the filing is for $250 million and the company will take the proposed ticker "GU" on the NYSE.  Merrill Lynch has been tapped as the lead underwriter in the syndicate and co-managers are listed as CIBC World Markets and Piper Jaffray.  So, take a look at the description and you will see what the potential excitement is:

• China’s largest biodiesel producer as measured by annual production capacity in 2006 by Frost & Sullivan…..
• One of the first commercial biodiesel producers in China; commenced operations in 2001 predecessor company, Sichuan Gushan Vegetable Fat Chemistry Co., Ltd., or Sichuan Gushan).
• Aggregate annual biodiesel production capacity increased from 40,000 tons in 2004 to 70,000 tons, 170,000 tons and 190,000 tons as of 2005, 2006 and 2007, respectively.
• Produced and sold 36,045, 61,119 and 158,994 tons of biodiesel in 2004, 2005 and 2006, respectively, and 136,587 tons of biodiesel in the nine months ended September 30, 2007. REVENUES: revenues and net income increased substantially during the same period…. generated revenues of RMB172.2 million, RMB360.8 million and RMB824.5 million (US$110.0 million) in 2004, 2005 and 2006, respectively, representing a compound annual growth rate, or CAGR, of 118.8%, and generated revenues of RMB736.4 million (US$98.3 million) for the nine months ended on September 30, 2007.
• Net income of RMB74.2 million, RMB152.5 million and RMB332.8 million (US$44.4 million) in 2004, 2005 and 2006, respectively, representing a CAGR of 111.8%, and recorded net income of RMB250.1 million (US$33.4 million) for the nine months ended on September 30, 2007.
• TARGET: to increase annual production capacity to 400,000 tons by the end of 2008.

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Jon C. Ogg
December 4, 2007

Jon Ogg can be reached at [email protected]; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.