plus 4, Automobiles : TRUCKS - Frederick News-Post

Automobiles : TRUCKS - Frederick News-Post
Concord Medical, KAR Struggle in Post-IPO Trading - Private Equity Hub
KAR Auction IPO raises less than hoped - KHOU
NASCAR: Kyle Busch joins the owners-drivers ranks - Auto123
Chinese car market overtakes that of United States - Item

Automobiles : TRUCKS - Frederick News-Post

Posted: 12 Dec 2009 07:01 AM PST

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Concord Medical, KAR Struggle in Post-IPO Trading - Private Equity Hub

Posted: 12 Dec 2009 05:35 AM PST

NEW YORK (Reuters) - Two companies' shares struggled in their debuts on the New York Stock Exchange on Friday, capping a week of poor performance for initial public offerings as investors grow choosier at year-end.

Chinese radiotherapy and medical imaging company Concord Medical Services Holdings Ltd (CCM.N), closed 13.6 percent below its IPO price, and used car and truck auctioneer KAR Auction Services Inc (KAR.N) closed up only 0.2 percent.

Stocks often rise 10 to 12 percent on their first day of trading.

Of the eight IPOs scheduled this week, one was withdrawn after the company was acquired, three were pulled due to bad market conditions and most of the rest traded lower on their first day.

The best performing IPO for the week — Pebblebrook Hotel Trust (PEB.N), a real estate investment trust that plans to buy hotels — rose just 2.2 percent on its first day of trading.

"There are no compelling, must-do IPOs this week," said IPOfinancial.com President David Menlow. "I think they (investors) just don't see anything there that makes a table-pounding argument to buy the stocks."

Investors' reluctance to take risk is more a matter of the time of the year than a broader fear of initial public offerings, Menlow said.

The China-based company, which raised about $132 million in its IPO, sold its shares for $11. It had originally planned to sell shares for between $9.50 and $11.50 apiece.

Concord Medical operates a network of radiotherapy and diagnostic imaging centers in China. As of Sept. 30, the company operated 83 centers in 36 cities there. The company, which sold 12 million American Depositary Shares, said it would use the proceeds to expand and develop research centers, and for general corporate purposes.

Underwriters were led by Morgan Stanley, JPMorgan and China International Capital Corp Hong Kong Securities Ltd.

Concord Medical posted net revenues of 205.7 million yuan ($30.1 million) for the nine months ended Sept. 30, up 101.6 percent from a year before. It posted net income of 89 million yuan, up 122.3 percent from a year earlier.

On Thursday, another China-based medical company struggled in its Nasdaq debut. China Nuokang Bio Pharmaceutical Inc closed down 3.7 percent at $8.67, after pricing for $9 late on Wednesday, below its expected pricing range.

A STRUGGLING INDUSTRY

Shares in vehicle auctioneer KAR Auction Services Inc also fell initially in their New York Stock Exchange debut on Friday, though they recovered to close slightly above the IPO price.

The shares were down as much as 7.4 percent earlier in the day. The Indiana-based company sold 25 million shares for $12 each and raised about $300 million on Thursday. It had originally planned to sell 23 million shares and had expected them to price for between $15 and $17 each.

KAR auctions used and salvaged vehicles. In 2008, the company sold more than 3 million cars and trucks.

CSM Worldwide analyst George Augustaitis said that fleet auctions of company and government vehicles will continue, but auctions of consumer-purchased vehicles, which are typically auctioned after 4- or 5-year leases, could dip in a few years if consumers continued to acquire fewer vehicles.

The auto industry worldwide has been hit hard as consumers scale back spending, and companies have accepted government funds to stabilize sales and prevent collapse.

"The business can dry up really quickly," said Augustaitis.

KAR Auction Services posted revenues of $1.3 billion for the first nine months of 2009, down 4.6 percent from a year before. The company posted net income of $17.9 million, versus a $166.9 million loss a year earlier. It said in a regulatory filing that it plans to use proceeds from the IPO to repay debt and loans.

Underwriters were led by Goldman Sachs & Co, Credit Suisse, Bank of America, and JPMorgan. The underwriters have the option to purchase an additional 1.8 million shares.

(Reporting by Clare Baldwin, editing by Gerald E. McCormick, Leslie Gevirtz)

fivefilters.org featured article: Normalising the crime of the century by John Pilger

KAR Auction IPO raises less than hoped - KHOU

Posted: 12 Dec 2009 05:14 AM PST

NEW YORK (AP) — KAR Auction Services Inc. shares will make their trading debut Friday, but the auctioneer of used and salvaged vehicles raised less than it had hoped in its initial public offering. The company's IPO priced well below its expected range at a time of deep uncertainty in the auto industry.

Vehicle sales in the U.S. have been at historic lows this year as the recession weighed on consumers' pocketbooks. With fewer people buying cars, fewer used and salvage vehicles are entering the marketplace, weighing on KAR's revenue.

"Their business is down," said Scott Sweet, senior managing partner at IPO Boutique. "Whether that improves in 2010 is subject to the same guess as if unemployment does."

KAR also has a heavy debt load. According to a regulatory filing, it owes creditors $2.5 billion. However, it still has $300 million in borrowing capacity.

"Wall Street right now does not look favorably at heavily debt-laden companies," Sweet said.

KAR took in $1.77 billion in revenue in 2008, but it lost money during that time. For the first nine months of this year, KAR had $1.31 billion in revenue and made a profit of $17.9 million.

On the bright side, most automotive analysts expect vehicle sales in the U.S. to rebound next year. Edmunds.com, an automotive research Web site, said it expects Americans to buy 11.5 million cars and light trucks in 2010, compared with 10.3 million this year. The market for leased vehicles — which virtually dried up during the recession — is beginning to recover. Both trends should help replenish the supply of used vehicles entering the market.

In addition, there is a high barrier to entry in the vehicle auction market, making it unlikely that it will face many new competitors in the future. Much of KAR's existing competition are smaller players that pose little threat.

The one exception is Manheim, an Atlanta-based auctioneer owned by media giant Cox Enterprises Inc. Manheim has been in the auto auction business since 1945 and controls about 50 percent of the market. KAR subsidiary Adesa controls 21 percent.

KAR, headquartered in Carmel, Ind., expected to raise $340.9 million through its IPO. It planned to sell 23 million shares, which were expected to price between $15 and $17. But late Thursday, the company said it would sell 25 million common shares at $12 each for total proceeds of $300 million.

Underwriters have a 30-day option to purchase up to another 3.75 million shares — up from 3.45 million as originally planned. If the option is exercised, KAR expects to bring in another $45 million.

A slew of high-profile banks are underwriting the offering, including Goldman Sachs, BofA Merrill Lynch, Credit Suisse and JP Morgan. The stock is expected to trade on the New York Stock Exchange under the ticker symbol "KAR."

KAR said it plans to use most of the proceeds from its IPO to shrink its debt. That plan has earned the approval of credit ratings agency Standard & Poor's, which said recently it could upgrade KAR's junk-level credit rating if it cuts its debt as planned.

KAR's IPO is the second in the auto sector this year. In September, A123 Systems Inc., which makes lithium-ion batteries for electric cars, raised $437.5 million in one of the most successful IPOs of the year.

Investors have high hopes that A123 will become a major player in the fledgling electric-car industry. Vehicle auctioning, on the other hand, is a mature business with less room for growth.

fivefilters.org featured article: Normalising the crime of the century by John Pilger

NASCAR: Kyle Busch joins the owners-drivers ranks - Auto123

Posted: 12 Dec 2009 04:02 AM PST

A few weeks ago, there was a buzz in the garage that triple-threat, Kyle Busch, was going to move his KBM (Kyle Busch Motorsports) up to the Camping World Truck Series, but he denied it.

On Friday the rumor became fact. "I pulled a pit road fake on everybody," he said with a grin. "I'm really proud of what this… I felt like the opportunity to have a nice announcement."

Busch, the 2009 Nationwide Champion, and NASCAR Sprint Cup and Truck driver announced a two-truck Toyota Tundra team with the possibility of adding a third.

Tayler Malsam will be the lead driver, running the full series, while Busch, who has cumulated 62 wins in NASCAR three-top series, will share the second truck with Brian Ickler (pronounced Ike-ler).

Busch explained, "For this year I've been working with late model teams across the country, the next logical step was the Camping World Truck Series.

"I've got a lot of leadership with Rick Ren, one of best guys in the series. Ren had previously been the crew chief on Ron Hornaday's championship truck on the team owned by Kevin Harvick Inc. Ren brings a career consisting of two championships and 27 victories. He will be our director of competition."

When asked if Tony Stewart's experience as a owner in the Sprint Cup series had any bearing on his decision Busch said, "I've talked to Tony here and there. I felt like Tony had a good (business) model."

Former champion, Johnny Benson was in the audience because Busch is hoping to find a sponsor for Benson to race a third truck.

One thing will not change for Busch who is also known as "Rowdy" . When asked about how he would drive as an owner, he grinned and said he wouldn't change his driving style just because he was the owner.

"I'll still tear off as many fenders as it takes to get a win," he said

fivefilters.org featured article: Normalising the crime of the century by John Pilger

Chinese car market overtakes that of United States - Item

Posted: 12 Dec 2009 03:48 AM PST

Chinese car market overtakes that of United States

By ELAINE KURTENBACH and DEE-ANN DURBIN
AP Business Writers

SHANGHAI – China has overtaken the U.S. as the world's biggest market for automobiles, the first time any other country has bought more vehicles than the nation that produced Henry Ford, the Cadillac and the minivan.

Now that the Chinese buy more cars and trucks than Americans, the shift could produce ripples for the environment, gas prices and even the kinds of cars automakers design.

More than 12.7 million cars and trucks will be sold in China this year, up 44 percent from the previous year and surpassing the 10.3 million forecast in the U.S., according to J.D. Power and Associates.

China has long been expected to overtake the U.S. since its population of 1.3 billion is more than quadruple that of the United States. But the increase in sales happened much faster than anyone expected because of China's tax cuts, its stimulus program and a depressed American market.

Two years ago, J.D. Power predicted China would pass the U.S. in 2025. Earlier this year, it forecast 2009 sales of just 9 million vehicles for China.

After a sharp slowdown in auto sales late last year, the Chinese government cut taxes on small cars and spent $730 million on subsidies to encourage sales of SUVs, pickups and minivans. A big stimulus program also boosted truck sales by pumping money into construction.

Auto sales were expected to rise with China's stimulus, but they have far exceeded expectations, said Jeff Schuster, J.D. Power's executive director of automotive forecasting.

Most experts think the top-sales title will shift back and forth between China and the United States for the next several years, with China ultimately prevailing.

Improving sales of autos and other big-ticket items is key to Beijing's strategy to promote stronger domestic consumption and lower dependence on exports.

"The government has sent a very clear message that they will not let the auto industry weaken, especially in 2010," say Jia Xinguang, chief analyst at China National Automotive Industry Consulting & Developing Corp.

Meanwhile, U.S. sales hit a 26-year low in early 2009 and remain well below the 17 million average from earlier this decade.

China's growing auto market is sure to affect the industry worldwide. Some key factors are:

CHINA'S CAR POLLUTION: It's gotten worse. China's fleet is newer, and big cities have imposed emissions standards that exceed those in the U.S., but lax enforcement of standards is a major problem. Vehicles may meet standards at first but then degrade over time.

On top of that, the number of vehicles on China's roads is soaring, although it's still a fraction of the U.S.

FUEL DEMAND: Global demand for oil is rising, fueled by China and India. Most energy experts agree that demand for crude has peaked in the U.S. Meanwhile, China's demand for oil used in transportation could more than double between 2007 and 2020, according to the World Energy Outlook, a joint study by the Organization for Economic Cooperation and Development and the International Energy Agency.

At home, China struggles both with the amount and quality of its fuel supply. A study by Harvard researchers found that refiners were not supplying fuel that was good enough to meet the country's rising emissions standards.

The cost of oil is prompting China to encourage a shift to cars and trucks that are more fuel efficient or run on batteries and alternative fuels. The government has raised taxes on gas guzzlers. China is the world's No. 3 net importer after the U.S. and Japan.

VEHICLE DESIGN: The Chinese will have more influence over vehicle design as they buy more cars. GM had its Chinese team design the 2010 Buick LaCrosse because the brand sells better in China than in the U.S. Buick is considered a luxury car in China.

The designers included sumptuous back seats for executives with drivers. They also used Feng shui principles and swooping designs based on Chinese art.

Chinese automakers will emerge stronger from the sales boom. BYD Co. aims to overtake Toyota as the global auto leader by 2030. Among BYD's backers is billionaire investor Warren Buffett.

China's sales may grow so large that cars designed for Chinese tastes are sold globally, the way U.S. vehicles are now. But some experts doubt that will happen until Chinese automakers become competitive on style and quality.

Meanwhile, as China's middle class expands, Chinese car shoppers are developing tastes similar to those of drivers in the U.S. and other wealthy nations.

"I talk to my friends in Beijing," says Crystal Jiang, a professor at Bryant University in Smithfield, R.I., who studies globalization. "I drive a Subaru, they also drive a Subaru."

fivefilters.org featured article: Normalising the crime of the century by John Pilger