The first Chinese railway to
be listed on the mainland stock market on Friday launched its initial public
offering (IPO), which is expected to raise 15-billion-yuan (US$1.87 billion).
Daqin Railway Co., started selling the first tranche of shares at 4.95 yuan
(62 U.S. cents) to private investors.
The company's IPO of 3.03 billion shares will be the second highest in
Chinese stock market history after the Bank of China, which raised 20 billion
yuan on the sale of six billion A-shares.
Daqin will release 1.06 billion shares, or 35 percent, on to the Shanghai
Stock Exchange, with another 1.06 billion shares sold to institutional
investors.
The company's 12 strategic investors, including insurers, fund companies, a
port group, an energy group and other big investors will split the remaining
0.91 billion shares.
However, a spokesman for the Shanghai Stock Exchange said Friday that the
exact date of the stock market offering was still under consideration by the
China Securities Regulatory Commission (CSRC).
Jiang Yong, investment manager of China International Capital Corp Ltd.
(CICC), Daqin's share dealer, said 230 institutions had applied for the 1.06
billion shares earlier this week.
The listing is expected to launch a period of major expansion for Daqin,
which has announced plans to buy new rolling stock and expand its carrying
capacity.
It also intends to purchase the the major coal lines of Fengtai
(West)-Shacheng-Datong and Datong-Ningwu, both of which it already manages.
Daqin operates the main coal shipping railway in northern China. The 1,000-km
line linking Datong City in coal-rich Shanxi Province and the port city of
Qinhuangdao, in Hebei Province, is expected to handle 250 million tons this
year.
Railway experts said more railway companies would follow the Daqin model by
listing to raise capital for construction.
Four other mainland companies, including Hengdiandongci, Baoli Property,
Tianyuan Science and Technology, and Weiertai also launched their IPOs this
week.
Their shares will be sold on both of China's bourses, the Shanghai Stock
Exchange and the Shenzhen Stock Exchange.
These IPO approvals came after the China Securities Regulatory Commission in
June approved the application by the Bank of China, the country's second biggest
bank, to go public in Shanghai.
