IPO: R H Energy Ltd.

By: Derek Lim

Price: S$0.32
Placement: 68,000,000
Public: 4,000,000
Date of Offer: 2 July 2007
Closing: 9 July 2007, 12:00pm
Commence Trading: 11 July 2007, 9:00am
Underwriter: CIMB-GK

The Business Times
Published June 4, 2007

IPO WATCH
Oil services firm RH Energy files prospectus

By CHEN HUIFEN

IN ANOTHER sign of the ongoing boom in the energy industry, RH Energy, which provides engineering services to the oil and gas sectors, has lodged a preliminary prospectus with the Monetary Authority of Singapore to raise funds for its expansion plans.

The company offers a full suite of design, procurement, construction, installation and consultancy services to oil and gas pipeline firms, as well as storage operators and oil companies. It counts PetroChina Group, Sinopec Group and CNOOC Group among its major customers.

RH Energy has been operating in China since 1998 and is currently building a compressed natural gas (CNG) pipeline infrastructure, including CNG stations, to serve a new tourist development zone in Hainan. This is expected to take up about $5 million of its IPO proceeds.

The company recently signed a non-binding memorandum of understanding with Hainan’s Fuel & Chemical Corp to form a joint venture company for the project.

RH Energy also plans to spend $1.5 million to construct a new fabrication workshop and buy more machinery to increase its production capacity.

‘We also intend to expand our existing range of products and services for oil and gas exploration and production as well as construction of petrochemical and refinery plants,’ it said in the preliminary prospectus.

Apart from the above, RH Energy will use the proceeds from the listing to expand its sales and marketing activities and for general working capital purposes. For the year ended December last year, it posted a net profit of $6.39 million, up from $4.01 million in FY2005. Revenue for the period fell to $26.98 million, from $40.8 million previously.

The group has the bulk of its operations based in Langfang, roughly 37km from Beijing. It has secured projects amounting to US$13.2 million, to be completed this year. The company is also in the process of entering into a contract for a US$13.1 million project to be delivered next year.

Click here for Kleer’s writeup on this IPO.

Click here for the full prospectus.

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