China Zenix IPO down on first day

Commercial auto wheel maker China Zenix International (ZX.NYSE) traded down on its first day on the New York Stock Exchange, Dow Jones reported. It opened at US$6 per share, flat with its IPO price, and went on to decline 2.7%. Its IPO pricing was already cut down from a range of US$9.50-11.50. China Zenix is the largest commercial vehicle wheel manufacturer in the country by sales volume, according to data from Frost & Sullivan. India is its largest export market, and demand for its products has increased as road infrastructure has expanded. In 2010, revenues increased by 50% to US$484.8 million and net profit margins increased to 10.2%, up from 8.6%. However, prospects for 2011 are less bright. Volatile raw material prices and changing demand are both expected to trim Zenix’s margins. At present tubeless steel wheels are replacing tubed steel wheels, and aluminum wheels are also increasingly popular. Both changes entail increased upfront investment costs for Zenix over the coming year.