Current Location: Homepage >  From Counselor’s Office  >  Asia Report >  Text
COSCO raises HK$9.5b in IPO
Tuesday,June 28,2005 Posted: 16:04 BJT(0804 GMT)  China Daily

BEIJING, June 28 -- China COSCO Holdings Ltd raised HK$9.52 billion (US$1.22 billion) in a Hong Kong initial public offering, after pricing the stock near the bottom of a proposed range amid tepid demand, sources close to the deal said.

Beijing-based COSCO, the nation's largest container shipping company owning the world's seventh-largest container line, sold 2.244 billion shares at HK$4.25 (54 US cents), at the low end of an indicative range, sources close to the deal said, asking not to be named.

The company offered the shares to investors at between HK$4.25 (54 US cents) and HK$5.75 (73 US cents) each, and plans to start trading its shares in Hong Kong on Thursday, said its prospectus released earlier last Monday.

The sale was arranged by HSBC Holdings Plc, J P Morgan Chase & Co and UBS AG, who declined to comment.

The IPO price represents 6.7 times 2005 earnings per share of HK$0.635 (8.1 US cents).

Shares of the already-Hong-Kong-listed Chinese shipping companies China Shipping Container Lines (CSCL) and Orient Overseas (International) Ltd have climbed 8.7 per cent and 6 per cent respectively in the past week, and trade at 4.1 and 3.6 times forward earnings.

COSCO is betting a higher valuation on its 52 per cent of ports and container leasing firm COSCO Pacific, which trade at 13.9 times 2005 earnings, said analysts.

China COSCO, whose profit more than doubled last year, raised less than the maximum it sought because of rising concerns that shipping rates will fall next year over excess capacity, said analysts.

"The slowing growth in transnational trade as well as the expanding transport capacities of ship owners worldwide are projected by industry experts to result in an imbalance in supply and demand, and ultimately lead to falling freight prices," said Li Lei, an industry analyst with Beijing-based China Securities.

HSBC forecasts freight rates are to fall 6.8 per cent starting next year, it said in a research report on COSCO last month.

COSCO collected revenue of 32.19 billion yuan (US$3.9 billion) last year, up 24.5 per cent, and its net profit rose by 139 per cent to 4.16 billion yuan (US$503 million).

The company plans to spend some US$1.8 billion on an expansion that will more than double the capacity of its container ship fleet to more than 800,000 TEU (twenty-foot-equivalent units) by 2010, from 303,197 TEU as of March.

(Source: China Daily)

(Source: English Site of Kuching)

【Big Medium-sized Small】 【Print】 【Transmit】 【E-mail】

All articles marked with "Article type: Original" posted on the website of the Ministry of Commerce and its sub-sites are copyrighted by this Website and its sub-sites. Any reproduction or use by any other websites, media or individuals must be attached with a clear indication of "Source: Ministry of Commerce Website".

All articles posted on this website or its sub-sites marked with "Article type: reproduced" or "Article type: translated" and "Article type: redistributed" come from other media, and are provided solely for the user's information, which does not mean this Website or its sub-sites endorse the ideas thereof or assume any legal liability or responsibility for their authenticity. Any other media, websites or individuals must maintain the source of information indication on this Website or its sub-sites when using the information, and shall assume legal liability for the use.

　 Release Comment： Pen Name: View Comment