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Second IPO funds cable projects

ZHEJIANG Wanma Cable Co yesterday said it will issue shares to fund two cable projects, making it the second firm to be given permission to go public on Chinese mainland after initial public offerings were resumed last week.

Zhejiang Wanma will issue no more than 50 million A shares to raise 342.5 million yuan (US$50 million). The new shares will be issued on the Shenzhen Stock Exchange on July 2, providing funds for a polyethylene cable project and a research center for developing electricity cables.

The new share sale is equivalent to 25 percent of its expanded share capital after the IPO, the company said. Ping An Securities will be its main underwriter.

Guilin Sanjin Pharmaceutical Co became the first company to get the approval from the China Securities Regulatory Commission after a nine-month IPO hiatus. Guilin Sanjin said it would launch an US$88-million IPO next Monday.

"The public offering by Zhejiang Wanma won't have a large impact on the market," Zhou Xu, a researcher at Nanjing Securities said. "It will have limited effect on investors considering its small amount of financing, and there is still enough liquidity in the market to support its upward trend."

The CSRC halted domestic IPOs in September after the Shanghai Composite Index slumped nearly 60 percent in the first nine months of last year on worries that more equity supply may lead the market to collapse.

As the index has rebounded more than 60 percent this year, regulators are expected to allow more IPOs soon, including that of the China State Construction Engineering Corp.


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