Beijing's Eastern Pioneer Driving School will be the first Chinese driving school to go public when it joins six other firms in staging IPOs in Shanghai and Shenzhen ahead of the Chinese New Year in early February.
Eastern Pioneer is seeking to raise 820 million yuan (around 124 million U.S. dollars) at 16.4 yuan per share in Shanghai. The company's share subscription began on Wednesday. Investors in China tend to oversubscribe shares for IPOs as they almost guarantee stellar rises in the first few days of trading.
A revised IPO rule effective this year allows investors to pay for shares they subscribed two days after submitting orders, thus preventing the freezing of large amounts of funds caused by upfront payment that usually cause volatility in the stock market.
Eastern Pioneer reported net profits of 175 million yuan during the first half last year, and 298 million and 265 million in 2014 and 2013. It offers driver training in Beijing, Hebei Province in north China and Yunnan Province in the southwest.
China has over 260 million drivers and training schools around the country churn out 20 million more each year, according to Shenwan Hongyuan Securities. Eastern Pioneer said it trained 237,000 in Beijing in 2014.
The company also shrugged off the threat from driverless cars, an emerging trend that has tempted major car makers around the world to roll out conceptual vehicles that do not need a human driver. Eastern Pioneer said the trend will not have a material impact on its business.
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