"I wasn't a bit worried," Ye said. "At the time, I paid in order to profit later. If the product is good, it will naturally open up a market."

London IPO

In the second half of 2004, the company, in order to expand its plans, began considering the idea of getting listed for financing. The idea of going public on the mainland was given up due to local investors' lack of understanding of bio-diesel fuel.

Ye then set his sights on Hong Kong, but reconsidered due to the unsuccessful development of Hong Kong's growth board market.

At this time, the London Stock Exchange sent out an invitation to Ye. He thought, in Europe, the industrialization of bio-diesel fuel has already had over 10 years of history, and investors are extremely familiar with this industry. Therefore, going public in London should garner more interest from investors. At the same time, the London Stock Exchange indicated that it had no rigid requests regarding a company's capital. The criteria for going public are flexible, and they want mainly to look at the company's development potential and industry development outlook, paying particular attention to businesses with solid technological strength.

Additionally, the European capital market is relatively mature and sufficient in funds. Compared with the NASDAQ, European IPO expenses are lower. Therefore, Ye selected the London Stock Exchange.

The right people

Considering the company's development in China and European investors' lack of understanding of the company's development, Ye hired from Britain three independent directors-a British bio-diesel specialist, a Royal British chartered accountant and a senior analyst of an investment bank-to engage in guidance and supervision in the facets of technology, financial auditing and market investment. The independent directors need to primarily protect the interests of small and medium investors; this was done mainly to increase the confidence of Europe's small and medium investors. At the same time, the independent directors were also professionals, and could stand on higher ground to supervise and guide company operations.

The right investors

When selecting strategic investors, Ye was also very discrete. He said that he could not reveal the investing institutions, but they are all long-term investors. The company does not consider venture capitalists. The company runs a practical business and hopes to give investors a healthy and stable investment environment. This will also benefit from the company's long-term development.

The bio-diesel market is indeed very large, but that doesn't necessarily mean that everyone will get a share of the pie. As it is a technology-oriented industry, there is a strict requirement for the technological strength of the manufacturer. If a business creates its own technology, this will put much stress on the capital and personnel of the new business; if the business relies on outside technology, then it will forever lag behind other manufacturers. Therefore, Ye advises investors against investing blindly.

New businesses typically have a growth period of two to three years. But businesses in the bio-diesel field have yet to witness sluggishness, because they have not been established long. After the growth period passes in three years, problematic businesses will appear, and opportunities will present themselves for mergers and acquisitions of certain stagnating businesses.

(Xinhua Finance)

DISCLAIMER: The information contained herein is based on sources we believe to be reliable, but is provided for informational purposes only, and no representation is made that it is accurate or complete. This briefing should not be construed as legal, tax, investment, financial or other advice, and is not a recommendation, offer or solicitation to buy or sell any securities whatsoever.