Good News on Listing | Frost & Sullivan Assists Leishen Energy Holding Co., Ltd. in Successfully Going Public in the US (NASDAQ:LSE)

Leishen Energy Holding Co., Ltd. (hereinafter referred to as "Leishen Company") successfully listed on December 19, 2024, issuing 1,375,000 common shares at an issue price of $4 per share, raising approximately $5.5 million in net proceeds.

During the process of listing in the US, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the company's competitive advantages, assisting the company, investment banks, and other intermediaries in completing the writing of relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the company communicate with the Hong Kong Stock Exchange and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and assisting the company in completing various feedback on industry issues from the US Securities Exchange.

• The company is a leading manufacturer of equipment such as ultra-high pressure natural gas reciprocating compressors;

   

• The company continuously improves and accumulates internal expertise and technology to win the trust of customers;

   

• The company's business model is continuously iterating to form diversified sources of revenue;

   

• The company has created an integrated upstream and downstream market competitive advantage;

   

• The company has effectively achieved cost savings by leveraging its industry advantages and deepening cooperation with customers.

According to a Frost & Sullivan report,

• ranked ninth among private natural gas compressor companies in China based on 2023 natural gas compressor revenue;

   

• ranked first among private ultra-high pressure natural gas compressor companies in China based on 2023 revenue;

   

• ranked first among private natural gas compressor leasing service companies in Southwest China based on 2023 revenue.

Oilfield services include supporting on-site activities and equipment for oil and gas companies during the exploration and production of natural resources (mainly oil and gas). Due to the complexity of the oil and gas industry, a variety of equipment and services are required in this process.

The entire oilfield service includes a series of activities from oil and gas resource exploration/finding, oil and gas well drilling and completion, logging, oil and gas production to oilfield engineering construction. In addition, oilfield technical services for oil and gas production include boosting services, cementing services, continuous tubing services, etc., as well as oilfield equipment leasing services and maintenance personnel and other services.

According to the location of crude oil extraction, the oilfield service market can be divided into onshore oilfield services and offshore oilfield services. Onshore oilfield services include conventional oil and gas development and primary unconventional oil and gas development, such as shale oil, shale gas, tight oil, coalbed methane, etc. Offshore oilfield services can be divided according to different water depths, such as nearshore continental shelf, deep water, and ultra-deep water.

The value chain of China's oilfield service market generally consists of upstream raw material suppliers, downstream oil and gas resource developers, and midstream oilfield service companies. Oilfield service companies can be divided into two categories: (i) oilfield equipment manufacturers, such as exploration equipment, drilling equipment, fracturing equipment, compressors, and expanders; (ii) oilfield technical service providers.

The scale of China's oilfield service market can be divided into two categories: (i) oilfield equipment market and (ii) oilfield technical service market. From 2018 to 2023, the revenue of the oilfield service market increased from 260.7 billion RMB to 382.8 billion RMB, with a compound annual growth rate of 8.0%. The oilfield service market is closely related to crude oil prices because higher oil prices will prompt oil and gas companies to increase capital expenditures to drill more oil wells, thereby driving the demand for oilfield services. However, in 2020, affected by the outbreak of the COVID-19 pandemic, oil prices fell significantly, and the oilfield service market decreased by 14.1% year-on-year in 2020.

At the same time, in 2023, the revenue of the oilfield technical service market was 337.5 billion RMB, accounting for 88.2% of the oilfield service market, while the revenue of the oilfield equipment market was 45.3 billion RMB, accounting for a smaller proportion. However, the growth rate of the oilfield equipment market exceeded that of the oilfield service market. From 2018 to 2023, the compound annual growth rate of the oilfield equipment market was 11.8%, while the compound annual growth rate of the entire market was 8.0%.

In the future, it is expected that the revenue of China's oilfield service market will maintain stable growth between 2023 and 2028, reaching 554.2 billion RMB by 2028, with a compound annual growth rate of 7.7%. In addition, it is expected that the revenue of the oilfield equipment market will reach 71.7 billion RMB in 2028, with a compound annual growth rate of 9.6% from 2023 to 2028, while the revenue of the oilfield technical service market is expected to grow at a compound annual growth rate of 7.4% from 2023 to 2028, reaching 482.4 billion RMB by 2028.

Source: Frost & Sullivan analysis

Natural gas is the most readily available gas medium for oilfield compressors, so oilfield compressors are mainly natural gas compressors. The revenue of China's natural gas compressor market increased from 6.8 billion RMB in 2018 to 9.1 billion RMB in 2023, with an average annual compound growth rate of 6.0%. In 2020, as oil prices fell, oil and gas companies reduced their oil and gas production. Therefore, the revenue of the natural gas compressor market remained at around 7.3 billion RMB in 2020. By the end of 2028, the revenue of China's natural gas compressor market is expected to reach 124 billion RMB, with a compound annual growth rate of 6.4% from 2023 to 2028, mainly driven by increased capital expenditures for oil and gas exploration and drilling.

Source: Frost & Sullivan analysis

In the later stages of oil and gas field production, the oil and gas pressure is low, making extraction difficult. Therefore, some oil and gas companies use ultra-high pressure natural gas compressors to extract oil and gas.

The revenue of China's ultra-high pressure natural gas compressor market increased from 187.6 million RMB in 2018 to 373.4 million RMB, with an annual compound growth rate of 14.8%. Although affected by the decline in oil prices, the ultra-high pressure natural gas compressor market still maintained growth in 2020, with a year-on-year growth rate of 1.4%.

In the future, with the increasing application of ultra-high pressure natural gas compressors in oil and gas production, the revenue of the ultra-high pressure natural gas compressor market is expected to reach 630.5 million RMB in 2028, with an annual compound growth rate of 11.0%.

Source: Frost & Sullivan analysis

In China's oilfield service market, based on the total revenue of China's natural gas compressor market in 2023, the top ten private enterprises accounted for about 23.3% of the market share. Among the leading private enterprises, Leishen ranked ninth, accounting for 1.0% of China's natural gas compressor market.

Note: The above rankings do not include skidder operators in the market. Skidder operators engage in compressor assembly by purchasing parts from compressor manufacturers. Due to their lack of expertise in production, design, and maintenance of compressors, skidder operators cannot provide engineering technical support services. Generally speaking, oil and gas resource developers prefer natural gas compressor manufacturers that can both produce and provide services. Therefore, the top ten oilfield service suppliers in terms of natural gas compressor sales revenue only include companies that provide both natural gas compressor production and engineering services.

Source: Frost & Sullivan analysis

The number of enterprises in China with the ability to produce and research and develop ultra-high pressure natural gas compressors is limited. Based on the sales revenue of China's ultra-high pressure natural gas compressors in 2023, Leishen ranked second, with a market share of about 24.2%, while Leishen ranked first among private enterprises.

Note: The above rankings do not include skidder operators in the market.

Source: Frost & Sullivan analysis

Frost & Sullivan has rich research experience in the energy and power industry, assisting well-known enterprises to successfully list on the capital market. Recent successful listing cases include: Reshape Energy (2570.HK), Guofu Hydrogen Energy (2582.HK), Huizhu Technology (2481.HK), Guohong Hydrogen Energy (9663.HK), Huzhou Gas (6661.HK), MingYang Smart Energy (MYSE:LI), PowerChina (SDIC:LI), Nanguan Energy Technology (1597.HK), Jiaxing Gas (9908.HK), Chuncheng Thermal Power (1853.HK), CNPC Clean Energy (1759.HK), Jiutai Bangda (2798.HK), TL Natural Gas (8536.HK), Tianbao Energy (1671.HK), Yuguang International (1621.HK), Jintai Feng (8479.HK), Zhongcheng Energy (2337.HK), Inner Mongolia Energy Engineering (1649.HK), Rescogen (1679.HK), Persta Resources (3395.HK), Xinte Energy (1799.HK), China Energy Engineering (3996.HK), North China Energy (NASDAQ:CNEY), etc.