New Issues Examined by Ben Jaglom

The new issue market has remained sluggish in 2011 with new funds raised down by almost 75 per cent to £87.1 million in the first four months of the year.

After a torrid time of late for Chinese companies on AIM in which a number of delistings have taken place, sinophiles are likely to be pleased at the news that a new Chinese company is looking to join the junior market.

Leading the charge of what many are probably hoping is a glut of Chinese new issues is bioenergy concern China New Energy, which is looking to raise £600,000 through its broker SVS Securities. Registered in the Guangzhou province in Southern China, the company describes itself as a ‘technology, process and engineering solutions provider’ with a number of bioethanol and biobutanol projects in the works.

The company provides its services to a number of operators in the bioenergy sector, for uses including the drinks and chemicals industries.  China New Energy is led by Chinese directors – chairman Yu Weijun chairs the board while Tang Zhaoxing is the CEO. However it does boast a British NED – Richard Bennett, CEO of AIM listed telecoms outfit Coms and the founder of low-carbon energy producer Jade Clean Technology.

Following the delistings of AIM heavyweights such as industrial batteries and power supplier China Shoto, cement producer West China Cement and software concern China Eastsea Business Software, the news of the new entrant will hopefully contribute towards settling the nerves of those who argue that AIM offers little to Chinese and China-focused companies. Investor excitement has already pushed the shares from their listing price of 7p to over 12p, forcing the company to issue a ‘no reason for the movement’ announcement. At current levels the shares are up with events.

Conveyancer seeks a listing

Another interesting company joining AIM is conveyancing concern In-Deed, a company set up by Harry Hill – not the comedian but the founder of property search website and FTSE 250 constituent Rightmove. Launched last month, the site enables people to track the progress of the purchase of their house.

The company argues that the conveyancing industry (conveyancing is the process by which individuals take the legal steps to purchase a property) is ‘fraught with stress’ with a ‘long history of disappointing customers.’ In-Deed argues that it will be ‘revolutionising’ the sector by creating a cheaper and more effective service that will mostly take place online (www.in-deed.net). In-Deed uses the services of a number of different law firms to provide conveyancing services and offering a ‘price promise’ that insists provides ‘no hidden extras’ and ‘no nasty surprises.’

Hill, who also served as the chief executive at estate agency chain Countrywide will be joined by its co-founder Peter Gordon, formerly a partner at private equity group 3i. On the non-executive side Philip Williamson,  former CEO of Nationwide Building Society will be joining the board. The company is hoping to raise £1.6 million through its broker Numis at 42p a share.

Conveyancing is certainly not the most exciting business but there are a number of reasons why the company could succeed. Firstly, Harry Hill himself has made a name for himself in the UK property sector through Rightmove and few people know the industry as well. Secondly, it offers to a cheaper service than competitors, in addition to the promise of a ‘no completion, no fee’ system. It is worth giving it a few months to see how the company performs post-IPO but the shares are certainly worth an investigation and In-Deed is likely to be one I will keep an eye on when it joins AIM.