We bring you information on the latest red-hot Chinese IPO to reach Hong Kong, China Plutonium (2390).

SinoPluto IPO launched
1 April 2007

The latest IPO to radiate to Hong Kong from China's superheated economy is China Plutonium International Holdings Ltd (or SinoPluto, as it is commonly known, Stock Code: 2390).

SinoPluto, with its headquarters in Daya Bay, Guangdong, started out as a re-processor, but has recently signed a letter of intent to acquire exclusive rights to China's largest Plutonium mine, in Xinjiang province, in order to give the business critical mass. Book-building for the IPO has begun and is rapidly approaching meltdown levels, according to a source close to the offer, who said "this deal is going like a bomb - one person tells 2 more, and each of them tells 2 more, and pretty soon you have a chain reaction". He blamed the explosive demand for the IPO on too many punters chasing Chinese stocks, or what many are calling the China Syndrome. One fund manager cautioned that if the current bubble bursts in the middle of this IPO then the fallout could last for years.

Bankers had reportedly considered splitting the offer into two tranches in Shanghai and Hong Kong, but in the end the CSRC saw the benefits of combining the two halves into a critical mass in Hong Kong. If the offering is successful then they may also inject China Deuterium and China Tritium, which could give the H-share a higher yield.

Leading tycoons in Hong Kong are believed to have become strategic investors ahead of the IPO, confirming that they regard SinoPluto as a private club for wealthy Chinese businessmen. Apparently they only made it to the second paragraph of the prospectus which talks about the business involving "high-level enrichment" and assumed it was a sure-fire thing.

Although it declined to name them, SinoPluto's largest customers are believed to include KimJI Enterprises Ltd, based in North Korea, which has recently tested its first bomb and may have recently launched a new product line of fake HK$1,000 "Supernotes" after the US Government clamped down on fake US$100 bills allegedly being laundered through Macau. SinoPluto is also believed to have done significant business in Pakistan in the past.

Governance activists have been quick to criticise the company for putting too many family members on the board and combining the roles of Chairman and CEO, which are held by Mr Fu Shun, while his wife, April Fu Liu-Ah, is finance director.

© Webb-site.com, 2007

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