IPO on the ASX
type of offer
NZ$2,200.00 - NZ$440,000.00
size of offer
price per share
Hi, would you know which registry our crowdfunding shares went under? Did we get an SRN with the ASX IPO? how do I get it? thanks in advance.
what progress on listing and issue of shares...is there a final nz$ value on share allocation
Gordon, allotment occurred today. Holding statements will be mailed tomorrow. Listing should occur within a week of mailing.
Replied to gordon davis
The DFM 30 June 2015 Interim financial report has now been released. The can be reviewed and downloaded from the below link.
The link below is to an interview with the Lead Manager of the DFM IPO Barry Dawes of Paradigm Securities who discusses the DFM business and the investment opportunity.
When is the expected date of listing and under what ticker......will it be listed on ASX , NZX or both
Gordon, the current expected date of listing is October 7 2015. It will be only on the ASX under the ticker DFM.
Replied to gordon davis
Why is this listing on the ASX instead of Hong Kong or China Stock exchanges ?
Thanks for your questions James. Please see Section 1.2 ASX Listing of the Prospectus for more detail.
The key advantages of listing on the ASX over other stock markets that the Directors have assessed as are:
• simpler listing process;
• high transparent government regulation;
• low cost of maintaining the listing; and
• good agricultural business investment exposure.
Replied to James Docking
The Dongfang IPO offer has extended. This is primarily due to an important large investor requiring more time to complete the application process.
The new Application close date is expected to be 21 September with the Settlement date 24 September and Allotment date 25 September. These dates assume the expected formal granting of relief enabling an extension within the next 48 hours. If the formal approval takes longer than 48 hours these revised dates may alter reflecting any later date.
With greater than 75% of shares owned by 1 person (even after it is ASX listed), there seems to be poor liquidity. Thoughts?
While the market cap of the company will be in the order of A$380-400M the current IPO raise of between A$39M – A$50M represents the potential free float – ie while in market cap % terms the liquidity will be low, there is 100% potential liquidity in the IPO issued shares.
The company has a strong earnings track record and the Prospectus forecast is A$75m making it very attractive from a PE Ratio perspective and the company would expect earnings to continue to grow. Consequently, over time the market acceptance of the company should be increased and potentially further improving liquidity.
Replied to Amarnath Premnath
See Section 5.1 of the Prospectus for more detail
The main undertaking of Dongfang Modern comprises of the wholly-owned People’s Republic of China company Ganzhou Chinese. This subsidiary (wholly-owned company) is in the business of cultivating and selling citrus products like tangerines, navel oranges, pomelos, and camellia tree products.
The Company’s operations are based in the Ganzhou City district in Jiangxi Province in China.
See Section 6.8 of the Prospectus, for more detail
Ganzhou Chinese has developed long-term relationships with a range of wholesale customers through its consistent focus on quality, reliable supply and dedicated customer service. Through this, Ganzhou Chinese enjoys a relatively even spread of revenue reliance from its customer base, with the largest customer accounting for approximately 13% of revenue in 2014.
Ganzhou Chinese’s major sales contract terms are as follows and are expected to continue in the future:
- Company pays packaging costs;
- Customers collect the products at site and pays transportation;
- Payment must be made in cash or by bank transfer within 30 days from the actual delivery date.
See Section 5.2 of the Prospectus for more detail
The agricultural product farming and sales industry in China is characterized by being highly fragmented. Within the PRC the top five companies in the agricultural citrus product farming and sales industry only had a combined market share of about 3.5% in 2014. Within Ganzhou, the agricultural product farming and sales industry in Ganzhou is also highly fragmented. Ganzhou Chinese has 7.2% market share in Ganzhou with the next top four farming companies in Ganzhou being Asian Citrus Holding Limited, Jiangxi Yang’s Trade Co., Ltd. Anyuan County and Shengda Fruit Industry Co., Ltd., and Ruijin Pinguan Agricultural Development Co., Ltd which hold a combined 16.1% market share in Ganzhou.
See Section 6.3 of the Prospectus for more detail
Ganzhou Chinese is an important market leader in the citrus industry in the PRC. The Company’s competitive strength in the PRC citrus industry is due to the following:
- Ideal location for fruit cultivation
Ganzhou Chinese’s plantations are all located in the areas of Jiangxi province that enjoy a significant amount of sunshine, good levels of rainfall and long frost-free periods each year.
- Established first mover advantage in scale and size
As with many industries in China, the supply of citrus fruits and camellia fruits and seeds is highly fragmented across several regions and many farming communities. Ganzhou Chinese has invested significant capital to aggregate plantations through leases and acquisition of farming rights and has spent several years developing these plantations to the current scale and size of over 200,000 tones of fruit per year. Any new entrant hoping to reach the scale and size of company’s operations to compete on the same volume level, would require substantial capital over many years to spend on plantation land acquisition, local supplier network building and marketing.
- PRC Government Incentives Ganzhou
Chinese has benefited from various financial incentives which include reduced tax rates and other financial measures. Effective from 1 January 2008 Article 27 of the New Tax Law and Article 86(1) of the New Tax Law Implementation Rules stipulates that enterprises engaging in certain agricultural activities, including growing of fruits and selection and cultivation of new agricultural species, are exempt from China Enterprise Income Tax (EIT) and business tax. The Company has been able to benefit significantly from this opportunity by being able to reinvest almost all its operating cashflows into acquiring additional plantations and capital upgrading of existing operations.
- Well-established and stable network input suppliers
Ganzhou Chinese has made a substantial commitment to identifying key reliable suppliers of quality harvesting inputs such as pesticides, fertilizers and paper box as packaging materials. The consistent supply of high quality inputs is crucial to the business to maintain product value and quality. Ganzhou Chinese has maintained good and stable relationships with key suppliers and all of the major inputs have been sourced from five top suppliers which are all located in Jiangxi province. Long term relationships with these top five suppliers help Ganzhou Chinese to have a better bargaining power and a reliable supply of raw materials. Based on reasonable grounds, the Directors are of the opinion that the ability to obtain a steady supply of raw materials has helped Ganzhou Chinese to increase its production output and to maintain its quality standard.
- Experienced management teams with proven track record of delivering sustainable growth and profitability
Ganzhou Chinese’s management has proven knowledge and expertise in the agricultural industry. The management team has gained valuable experience over the last several years’ successful operation and has continually contributed to the Company’s expertise. Based on reasonable grounds, the Directors are of the view that the favorable external conditions, together with the established reputation among customers, will help Ganzhou Chinese to enhance its market position.
See Section 4.7 of the Prospectus for more detail
The payment of dividends by the Company is at the complete discretion of Directors.
Depending on available profits and the financial position of the Company, it is the current intention of the Board to pay final dividends in respect of full years ending 31 December each year. The payment of a dividend by the Company is at the discretion of Directors and will be a function of a number of factors including the general business environment, the operating results and financial condition of the Company, future funding requirements, capital management initiatives, taxation considerations, any contractual, legal or regulatory restrictions on the payment of dividends by the Company, and any other factors the Directors may consider relevant.
A final dividend is anticipated to be paid in respect of the period from 1 January 2015 to 31 December 2015. Based on a target payout ratio of 20% of pro forma NPAT, the CY2015 final pro forma dividend would be RMB 74.6 million (before PRC dividend withholding tax of 10% first applied at the Ganzhou Chinese company level) or between A$0.034 per share (Maximum Subscription) and A$0.035 per share (Minimum Subscription) (after PRC dividend withholding tax of 10%), assuming an exchange rate of RMB 1.00 = A$4.9353.
Subject to the above considerations, beyond FY2015, the Directors intend to target a payout ratio of 20% of NPAT. The level of payout ratio is expected to vary between periods depending on the factors above and, in particular, should value accretive strategic growth, acquisition or investment opportunities arise it may result in a payout ratio in the future that is less than the above target.
Prospectus 16th July 2015Download
Second Supplementary Prospectus
Second Supplementary ProspectusDownload
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The investors below have committed capital to the business in this funding round.