FRANKFURT -- Was Stabilus GmbH an exception, or did the auto supplier's public offering signal a new trend?
The manufacturer of gas springs and hydraulic dampers struck a chord with investors when it went public in late May. CEO Dietmar Siemssen celebrated its initial listing on the Frankfurt exchange.
That's because its stock was priced at 21.50 euros ($29) a share, and it could meet only a fraction of the demand at that price. In mid-July, Stabilus stock was trading about 20 percent more than the offering price.
Stabilus can see the result is a true vote of investor confidence. After all, the stock market does not greet every auto supplier with open arms.
This became clear less than a month later. On the Frankfurt and Warsaw exchanges, the Chinese auto supplier JJ Auto offered investors nearly 1.8 million shares. Investors in Frankfurt only wanted somewhat more than 100,000 of them for $9.70 each. The stock traded in mid-July at 18 percent below the issuing price.
Speculation about a public offering for Hella KGaA Hueck & Co., a German lighting supplier, was defused recently. The family-owned supplier has been examining growth options for years, including a public offering. But it doesn't plan to go public, according to CEO Juergen Behrend.
What makes public offerings attractive? "The appeal of potential public offerings is rising in light of low interest rates on one hand and the growth prospects for the global auto industry and a favorable stock exchange environment on the other," said Frank Biller, an investment analyst and head of automotive research at the Baden-Wuerttemberg State Bank.
"Since the beginning of 2013, the valuation environment of auto suppliers has improved significantly," Biller said. "This has been associated with higher achievable prices."