Ship firm eyes 3rd biggest share sale
By Ding Yining |
December 5, 2009, Saturday
|
Print Edition
Print Edition
CHINA Shipbuilding Industry, the nation's largest maker of vessel equipment, is seeking to raise as much as 14.7 billion yuan (US$2.15 billion) in Shanghai in perhaps the country's third-biggest initial public offering this year, and it will use the proceeds to expand production facilities.
The company said yesterday it will sell no more than 1.995 billion shares, or 30 percent of its stake, priced at 6.15 yuan to 7.38 yuan, which corresponds to 34 to 41 times its price-earnings ratio.
"The price range is not reasonable but within expectations, and we have to wait and see if its energy sector and military projects will support its future growth," said a Guotai Jun'an Securities analyst, who refused to be named.
The company is expected to boost its business in the energy and military sectors to about 45 percent in 2011 from 30 percent now.
About 67 percent of the capital raised, or 9.85 billion yuan, will be used to upgrade its production to make vessel parts and in other facilities. Another 33 percent will be invested in marine auxiliary machinery and transport equipment making, according to a draft company prospectus on November 25.
A total of 45 percent of the new shares will be available to institutional investors in offline subscriptions, and another 55 percent will be offered to both institutional and individual investors in online subscriptions.
The China Association of National Shipbuilding Industry said on Monday that orders for new vessels in the first 10 months sank 63 percent from the same period last year to 19.11 million deadweight tons. The output of domestic shipyards increased 54 percent to 32.08 million DWT in the same period.
The company said yesterday it will sell no more than 1.995 billion shares, or 30 percent of its stake, priced at 6.15 yuan to 7.38 yuan, which corresponds to 34 to 41 times its price-earnings ratio.
"The price range is not reasonable but within expectations, and we have to wait and see if its energy sector and military projects will support its future growth," said a Guotai Jun'an Securities analyst, who refused to be named.
The company is expected to boost its business in the energy and military sectors to about 45 percent in 2011 from 30 percent now.
About 67 percent of the capital raised, or 9.85 billion yuan, will be used to upgrade its production to make vessel parts and in other facilities. Another 33 percent will be invested in marine auxiliary machinery and transport equipment making, according to a draft company prospectus on November 25.
A total of 45 percent of the new shares will be available to institutional investors in offline subscriptions, and another 55 percent will be offered to both institutional and individual investors in online subscriptions.
The China Association of National Shipbuilding Industry said on Monday that orders for new vessels in the first 10 months sank 63 percent from the same period last year to 19.11 million deadweight tons. The output of domestic shipyards increased 54 percent to 32.08 million DWT in the same period.
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