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HK float plans boost Changsha Zoomlion
By Ding Yining |
July 7, 2010, Wednesday
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Online Edition
Online Edition
CHANGSHA Zoomlion Heavy Industry Science and Technology Development Co surged by the daily limit of 10 percent today in the Shenzhen market after it announced plans to list in Hong Kong to expand operations.
The construction machinery maker said its board members have approved a float of its shares in Hong Kong at an appropriate time. The stock closed at 18.84 yuan (US$2.78) today.
The new shares may account for no more than 15 percent of its outstanding shares after the listing.
The proceeds will be used to expand international business and upgrade sales and service networks, and extend its manufacturing and research ability.
Based on its current equity and price of its A shares, the company could raise up to 60 million yuan from its Hong Kong listing.
"Its successful listing in Hong Kong can help replenish its capital and will also speed up the company's overseas expansion," Sinolink Securities' Dong Yaguang said.
The brokerage recommended a "buy" on the stock but said machinery makers are generally undervalued on the Hong Kong market, which may have a negative impact on the A share price.
The company also said in a preliminary earnings report that first-half profit may rise over 50 to 100 percent from last year with strong sales.
Profit in the first six months may be between 1.6 billion yuan and 2.2 billion yuan, according to a separate report to the Shenzhen Stock Exchange. The company will also place 15 shares and 1.7 yuan of dividend for every 10 shares.
The construction machinery maker said its board members have approved a float of its shares in Hong Kong at an appropriate time. The stock closed at 18.84 yuan (US$2.78) today.
The new shares may account for no more than 15 percent of its outstanding shares after the listing.
The proceeds will be used to expand international business and upgrade sales and service networks, and extend its manufacturing and research ability.
Based on its current equity and price of its A shares, the company could raise up to 60 million yuan from its Hong Kong listing.
"Its successful listing in Hong Kong can help replenish its capital and will also speed up the company's overseas expansion," Sinolink Securities' Dong Yaguang said.
The brokerage recommended a "buy" on the stock but said machinery makers are generally undervalued on the Hong Kong market, which may have a negative impact on the A share price.
The company also said in a preliminary earnings report that first-half profit may rise over 50 to 100 percent from last year with strong sales.
Profit in the first six months may be between 1.6 billion yuan and 2.2 billion yuan, according to a separate report to the Shenzhen Stock Exchange. The company will also place 15 shares and 1.7 yuan of dividend for every 10 shares.
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