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Eagle Health to Raise $30M and List on ASX in June

Eagle Health to Raise $30M and List on ASX in June
Under its own brand, Eagle Health sells protein powder or amino acid based products through pharmacies, supermarkets and online channels.
May 29, 2017 By Simon Herrmann Tags: IPO, EHH

Eagle Health is the latest Chinese company to list on the ASX aiming to raise up to $30 million in a deal that values the ‘health food’ focussed company at around $130 million.

Eagle Health is a growing and profitable manufacturer and distributor of nutritional products and dietary supplements to Chinese consumers. Under its own brand, the company sells protein powder or amino acid based products through pharmacies, supermarkets and online channels.

You can invest in this IPO through our partner OnMarket*

In the past few years we have witnessed an increasing number of Chinese companies floating in Australia: Traditional Therapy Clinics (TTC), China Dairy Corporation (CDC), Tianmei Beverage Group (TB8) or XPD Soccer Gear Group (XPD) just to name a few. None of these companies have performed to date, in fact, Wise-owl’s analysis suggests that ASX listed Chinese companies have declined over 20% on average since the beginning of the year. Some have performed even worse since their IPO, burning thousands of investors, who are now left wondering where their money went.

Despite the obvious challenges and increased costs of going public in a foreign market, a growing list of Chinese companies will do about anything to list on the ASX. The official reason to come to Australia is usually the ‘prestige’ of an ASX listing, which seems to justify paying exorbitant brokerage costs and management fees.

Eagle Health believes an ASX listing makes sense as the company plans to expand operations into Australia in order to source local ingredients and import them into China to meet the growing demand for Australian made products. Management forecasts to pay a dividend as early as 2017 as a result of strong top line growth and steady earnings margins. Investor confidence has been shattered by Chinese listings, but can Eagle Health buck the trend?

Favourable health and wellness product consumption trends in China offer an attractive market opportunity, but regulatory hurdles dampen the outlook. Despite the company’s sound financials, geopolitical risks associated with China are quite significant and will likely dictate market sentiment during early trade. 

ASX Code: EHH
Shares on Offer: 75m
Listing Price: $0.40
Market Capitalisation: $130m
Listing Date: June 29

*Disclaimer: Clicking on this link will take you to a third-party website. We do not control or give advice regarding the content or links that appear on these sites and Wise-owl accepts no responsibility or liability in respect of any third party materials. Wise-owl may earn a commission from any product or service from third party websites.

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Simon Herrmann Author: Simon Herrmann May 29, 2017

Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.


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Disclaimer: Clicking on this link will take you to a third-party website. We do not control or give advice regarding the content or links that appear on these sites and Wise-owl accepts no responsibility or liability in respect of any third party materials. Wise-owl may earn a commission from any product or service from third party websites.

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