Juneyao Group’s Juneyao Air became the second A-share listed private airline in China when it held its IPO on May 27. Its share price quickly shot up 44.01% from the issue price of RMB11.18 to the maximum limit of RMB16.10 on the first day of trading.
Juneyao Air was previously China’s first private charter airline, Wenzhou Tianlong Air Charters, before it was incorporated in its current form in 2005. The airline has come a long way since Juneyao Group’s founder Junyao Wang chartered China’s first-ever private flight in 1991. Fast-forward 24 years and Shanghai-based Juneyao Air is now an A-share listed mid-size domestic airline with a fleet of 45 aircraft.
In the past three years, Juneyao Air chalked up annual net profit of RMB229 million (approx: US$36.88 million), RMB339 million (approx: US$54.6 million) and RMB415 million (approx: US$66.84 million). It also recorded RMB1.957 billion (approx: US$315 million) in revenue and RMB267 million (approx: US$43 million) in net profit in the first quarter of this year, a y-o-y growth of 163.33%.
Juneyao Air’s president Junjin Wang wants to make the carrier a time-honored brand to reward its investors after the IPO, and said it will continue strive to be a stylish, unique and premium airline.
Juneyao Air’s market value reached RMB9.145 billion (approx: US$1.47 billion) by the end of the first day of trading. It has RMB500 million (approx: US$80.53 million) in registered capital and plans to publicly issue 68 million shares to raise RMB715 million (approx: US$115 million), according to its latest prospectus.
The funds raised in the IPO will be used to purchase seven A320 aircraft and two auxiliary aircraft engines. Juneyao Air will expand its fleet to over 50 aircraft to join the league of medium-sized carriers.
The IPO makes Juneyao Air the sixth A-share listed Chinese airline and the second privately-owned Chinese airline listed after Spring Airlines. Spring Airlines’ share price at RMB141.22 by the end of trading on May 27 is eight times of its issue price in January 2015.
An industry observer expects Juneyao Air’s share price to exceed RMB30 within three months and follow in the footsteps of Spring Airlines to surge above RMB100 in the future.
Junyao Wang’s son Han Wang holds 29.4% equity in Juneyao Air. Based on the company’s total market value at the end of trading, his equity is worth RMB2.69 billion (approx: US$433 million) . This has made him the top young heir in the Wenzhou area with the highest net worth and the largest single shareholder of one of the listed companies in Wenzhou.(Translation by David)
