China Sunergy, TechTarget Make Swift Gains Post-IPO
Last Update: 5/17/2007 2:31:16 PM
By Yvonne Ball
Of DOW JONES NEWSWIRES
A Chinese solar cell manufacturer and a technology stock were the star performers
of the initial public offering market Thursday, racking up double-digit gains on
their first day of trading on the Nasdaq Stock Market.
The strong debuts overshadowed another debutante, Netherlands-based health care
company Eurand NV (EURX), which slipped below its IPO price.
China Sunergy Co. Ltd. (CSUN) opened at $12 a share, a 9% premium to its $11 IPO
price. The stock has since climbed higher, recently trading at $14.65 a share, up
$3.65, or 33.2%.
Some 8.5 million American depositary shares were sold into the offering at $11 a
share, above the expected range of $8 to $10 per ADS, which was set by
underwriter Merrill Lynch & Co. (MER).
China Sunergy joins other solar cell debutantes in the U.S., JA Solar Holdings
Co. Ltd. (JASO), which went public in February, and Trina Solar Ltd. (TSL) and
Solarfun Power Holdings Co. Ltd. (SOLF), which made their debut last year.
Of the three, JA Solar and Trina continue to trade well above their IPO prices,
while Solarfun was trading at a slight discount to its offering price.
They will soon be joined by another Chinese company, LDK Solar Co., which could
raise as much as $469 million when it debuts on the New York Stock Exchange in
coming weeks.
"They are doing well, it is alternative energy, and their (financial) numbers are
quite explosive," said John Fitzgibbon, an IPO analyst and founder of
IPOScoop.com, adding there were probably more solar cell companies contemplating
a public offering.
"The best of the best go public and if they work, the rest come," he said.
China Sunergy manufactures solar cells from silicon wafers, using crystalline
silicon solar cell technology to convert sunlight directly into electricity. The
company has grown rapidly since its formation three years ago.
At the end of last year, China Sunergy had six solar cell manufacturing lines,
with an aggregate production capacity of 192 megawatts a year.
Its rapid growth is reflected in its balance sheet. The company sold 4.4 MW of
solar cells in 2005, rising to 46.4 MW in 2006.
As a result, its net revenues soared from $13.7 million to $149.5 million over
the same period. The surge in revenue enabled China Sunergy to move from a
$300,000 loss in 2005 to an $11.8 million profit last year.
Meanwhile, TechTarget Inc. (TTGT), one of the week's most anticipated public
offerings, also performed strongly, soaring 12% on its debut. The stock opened at
$14.50 a share, well above its IPO price of $13, set by underwriters Morgan
Stanley (MS) and Lehman Brothers Holdings Inc. (LEH). The stock was recently
trading at $15.05 a share, up $2.05, or 15.8%.
Some 7.7 million shares were sold into the oversubscribed offer, which priced at
the midpoint of the expected range of $12 to $14.
Analysts reported strong demand for shares in TechTarget, which continues the
resurgence of IPOs from the technology sector.
It marks the 13th technology stock to go public so far this year, representing
18% of all IPOs priced in the U.S., according to Thomson Financial.
TechTarget provides online content aimed at bringing together buyers and sellers
of corporate information technology products.
Scott Sweet, managing director of IPOBoutique.com, an IPO research service, says
TechTarget's business represents a significant departure from the past.
"IT managers had to manually assemble and disseminate volumes of product
offerings through multiple Web sites or hearsay," he said. "TechTarget has now
provided a proven site that fits the past large gap between the buyers and the
sellers."
TechTarget derives almost all of its revenue by selling advertising to its
1,000-plus active advertisers.
The company generated revenue of $18.3 million in the first quarter, resulting in
a modest profit of $317,000. Last year, the company booked revenue of $79 million
and a $7.2 million profit.
In contrast with China Sunergy and TechTarget, Eurand failed to entice investors,
opening on the Nasdaq at a slight discount to its IPO price.
Eurand opened at $15.90 a share, below its IPO price of $16, set by underwriters
Deutsche Bank AG (DB) and Lehman Brothers Holdings. The stock was recently
trading at $15.19 a share, down 81 cents, or 5.1%.
Some 7 million shares were sold into the offer, which priced below the expected
range of $17 to 19 a share.
Two Phase III clinical trials have been completed for Eurand's lead product
candidate, EUR-1008, for the treatment of exocrine pancreatic insufficiency.
In 2006, the company reported a $6.6 million net loss and at the end of December,
Eurand had an accumulated deficit of about $61 million.
-By Yvonne Ball, Dow Jones Newswires; 201-938-5289;
yvonne.ball@dowjones.com
(END) Dow Jones Newswires
