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Ningbo Port IPO encounters tepid market reaction
By Pan Xiaoyi |
September 28, 2010, Tuesday
|
Online Edition
Online Edition
NINGBO Port Co, operator of the world's second-busiest harbor by total throughput, fell below its offer price on its Shanghai debut today due to lukewarm investor sentiment.
It may herald another round of slack performance by companies that launch initial public offering.
"It reflected the waning enthusiasm towards IPOs and sluggish local equity market," said Wu Yan, an analyst from Daton Securities Co. "Investors seeking IPOs may face increasing risks as more shares, especially big chips, may decline on trading debut in this round of bearish market."
The company fell 3.5 percent to close at 3.57 yuan, versus a 0.63 percent dip in the benchmark Shanghai Composite Index.
The operator of Ninbo Port raised 7.4 billion yuan in China's sixth-largest IPO this year after it reduced the size of its share offer by 20 percent to 2 billion shares amid a stock market slump. The offer price was 3.7 yuan apiece, equivalent to 29.3 times its earnings in 2009. The proceeds will be used to fund the construction of coal and container berths as the global trade is recovering.
The key gauge has fallen 20 percent this year as the government tightened measures to avert asset bubbles and inflationary risks. Big chips have underperformed compared with mid-and-small board and Growth Enterprise Market.
Ningbo Port Co handled 279 million tons of cargo in 2009, helping the company to post a net profit of 1.84 billion yuan with a total turnover of 4.88 billion yuan.
It may herald another round of slack performance by companies that launch initial public offering.
"It reflected the waning enthusiasm towards IPOs and sluggish local equity market," said Wu Yan, an analyst from Daton Securities Co. "Investors seeking IPOs may face increasing risks as more shares, especially big chips, may decline on trading debut in this round of bearish market."
The company fell 3.5 percent to close at 3.57 yuan, versus a 0.63 percent dip in the benchmark Shanghai Composite Index.
The operator of Ninbo Port raised 7.4 billion yuan in China's sixth-largest IPO this year after it reduced the size of its share offer by 20 percent to 2 billion shares amid a stock market slump. The offer price was 3.7 yuan apiece, equivalent to 29.3 times its earnings in 2009. The proceeds will be used to fund the construction of coal and container berths as the global trade is recovering.
The key gauge has fallen 20 percent this year as the government tightened measures to avert asset bubbles and inflationary risks. Big chips have underperformed compared with mid-and-small board and Growth Enterprise Market.
Ningbo Port Co handled 279 million tons of cargo in 2009, helping the company to post a net profit of 1.84 billion yuan with a total turnover of 4.88 billion yuan.
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