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Plan to list in HK boosts firm
By Ding Yining |
July 8, 2010, Thursday
|
Print Edition
Print Edition
Changsha Zoomlion Heavy Industry Science and Technology Development Co surged by the daily limit of 10 percent yesterday on the Shenzhen stock market after it announced plans to list in Hong Kong to expand operations.
The stock closed at 18.84 yuan (US$2.78) yesterday.
The construction machinery maker said in a statement yesterday that its board members have approved it to float shares in Hong Kong at an appropriate time. 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 its international business and upgrade its sales and service networks. It will also use the proceeds to boost its manufacturing and research capability.
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 listing in Hong Kong, if successful, can replenish its capital and will also speed up the company's overseas expansion," Sinolink Securities analyst Dong Yaguang said.
The brokerage retained its "buy" recommendation on the stock but said machinery makers are generally undervalued in the Hong Kong stock market, which may have a negative impact on the price of its A shares.
The company also said in a preliminary earnings report that first-half profit may soar more than 50 percent to 100 percent from that of last year as sales expanded strongly on higher market demand.
Profit in the first six months this year may range from 1.6 billion yuan to 2.2 billion yuan, according to a separate report to the Shenzhen Stock Exchange.
The stock closed at 18.84 yuan (US$2.78) yesterday.
The construction machinery maker said in a statement yesterday that its board members have approved it to float shares in Hong Kong at an appropriate time. 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 its international business and upgrade its sales and service networks. It will also use the proceeds to boost its manufacturing and research capability.
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 listing in Hong Kong, if successful, can replenish its capital and will also speed up the company's overseas expansion," Sinolink Securities analyst Dong Yaguang said.
The brokerage retained its "buy" recommendation on the stock but said machinery makers are generally undervalued in the Hong Kong stock market, which may have a negative impact on the price of its A shares.
The company also said in a preliminary earnings report that first-half profit may soar more than 50 percent to 100 percent from that of last year as sales expanded strongly on higher market demand.
Profit in the first six months this year may range from 1.6 billion yuan to 2.2 billion yuan, according to a separate report to the Shenzhen Stock Exchange.
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