Chow Steel set for 200m-share IPO next month

Pinmanee Makmontana, managing director of Triple A Plus Advisory Co, its financial adviser, said Chow Steel would benefit from economic recovery and increasing demand for steel in construction projects.

The company has also enlarged its client base.

"Those are the important factors to support business growth in the future, which have already been reflected in the nine-month operating results," she said.

Seeking a listing on the Market for Alternative Investment in mid-December, Chow Steel in the first nine months of this year achieved 85 per cent of its annualised revenue target of Bt5 billion.

Proceeds from the capital increase will be used to grow its upstream steel business. The company produces steel billets for the production of construction steel. The 200 million new shares will increase its capital to Bt800 million.

"The proceeds will be used to fund business expansion and reduce costs, which will result in better net profit," Chow Steel chief executive officer Anavin Jiratomsiri said. "After the offering of the new shares, the shareholding ratio of the Jiratomsiri family will decrease from 84.5 per cent to 63.4 per cent."

He added that as its steel production is mainly aimed at substituting for imports, the company had the advantage in delivery cost and on-time delivery. Its customers do not need to handle big lots of billets, as in the case of imports.

New orders are expected to grow next year as the steel business continues to expand thanks to the government’s mega-projects and demand for renovation and repair after the floods.

The company’s revenue for 2011 is targeted to grow by about 30 per cent from Bt3.89 billion last year.