CHINA / Taiwan, HK, Macao |
Port builder eyes local listing by early 2008(China Daily HK Edition)Updated: 2006-11-29 10:24 Top Chinese port builder China Communications Construction Co, readying a US$2.1 billion Hong Kong IPO, plans to sell up to 3.5 billion Shanghai-listed A shares by early 2008, a listing document said. It is based on the high end of its Hong Kong initial public offering price range, which means the company's Shanghai listing could raise a further US$2.06 billion. The company, which is involved in infrastructure design and construction, dredging and port machinery manufacturing, kicked off its formal IPO marketing road show on Tuesday just as the recently high-flying Hong Kong market fell about 3 per cent after sharp declines on Wall Street. Mainland shares listed in Hong Kong fell an even steeper 4.47 per cent yesterday after last week's record highs. The skid is badly timed for at least 11 companies that plan to raise as much as US$6.8 billion in Hong Kong IPOs by the end of the year. "The market correction will affect the response to upcoming IPOs. Investors will be more selective," said Y.K. Chan, a strategist at Phillip Capital Management (HK) Ltd. China Communications Construction had earlier planned to list simultaneously in Hong Kong and Shanghai but then delayed its domestic share sale due to technical issues. Its Hong Kong trading debut is set for December 15. The domestic A-share offering should take place by February 7, 2008, with the precise timing depending on regulatory approvals and market conditions, its preliminary prospectus said. In its Hong Kong listing, the State-run company is offering 3.5 billion shares at HK$3.4 to HK$4.6 apiece, representing 13.4 to 18.2 times its 2006 forecast weighted average earnings. By comparison, global construction companies such as Britain's Balfour Beatty Plc and US-based Washington Group International trade at 14.7 times and 22.7 times prospective 2006 earnings, respectively. Infrastructure design company Fluor Corp of Texas trades at 30.6 times of its prospective earnings. Beijing-based China Communications Construction plans 7.3 billion yuan (US$930 million) in capital expenditure in 2006, an increase of 32.6 per cent, to bolster its infrastructure construction and dredging businesses. "China will continue to increase its port capacity, given the constraint in major coastal ports. The company will be among the key beneficiaries of this increase," UBS, one of the firm's initial public offering sponsors, wrote in a research report. The company plans to earmark a combined US$250 million worth of shares for three corporate investors: China Life Insurance (Group) Company Ltd, New World Development Chairman Cheng Yu-tung and the Government of Singapore Investment Corp Pte Ltd (GIC). The company plans to use its IPO proceeds for the purchase and upgrade of equipment and vessels. The offering is being sponsored by UBS, Merrill Lynch and BOC International. |
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