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CHINA
Shipping Container Lines Co.,
Asia’s second-largest container line, attracted 2.6 trillion yuan
($351 billion) worth of orders for its
Shanghai
stock sale, said three people familiar with the
offering.
The
Shanghai-based shipping line has said it aims to sell as
much as 15.5 billion yuan in stock.
The
people asked not to be identified before an official
announcement.
The sale
drew bids for about 170 times the stock on offer, as
demand for new shares withstands the worst monthly fall
in Shanghai’s stock market in at least 12 years.
The
proceeds will help China Shipping expand its fleet and
add routes to compete with larger rival China Cosco
Holdings Ltd. “In the current volatile market, investors
prefer new share sales as they are seen as less risky,”
said Roslyn Ji, an analyst at Core Pacific-Yamaichi
International Ltd. in Hong Kong.
“Large
companies named after ‘China’ are particularly favored.”
China
Railway Group Ltd.,
Asia’s biggest
construction company, drew 150 times the stock on offer
for its 22.4-billion-yuan
Shanghai
share sale last month.
PetroChina Co.’s October sale had $441 billion of bids,
or about 50 times the stock on offer.
The
company became the world’s largest by market
capitalization after the sale.
China
International Capital Corp. (CICC) and UBS AG arranged
the China Shipping sale.
Jessie
Sun, a Beijing-based CICC spokeswoman, and Chris
Cockerill, a UBS spokesman in Hong Kong, declined to
comment. Ye Yumang, China Shipping’s company secretary,
wasn’t immediately available.
The
shipping line’s Hong Kong shares, which have surged more
than fourfold this year, fell 2.3 percent to HK$6.52 at
the
12:30 p.m. trading break.
Valuation China Shipping’s yuan-denominated shares may
rise at least 30 percent when they start trading,
according to Ji.
The
company plans a debut ceremony at the Shanghai Stock
Exchange on December 12.
The
company’s Hong Kong-listed stock trades at 16.3 times
next year’s estimated earnings, according to data
compiled by Bloomberg. China Cosco shares trade at 32
times next year’s estimated earnings in Shanghai and
13.6 times in Hong Kong.
“There
will be a gap between the stock in Shanghai and Hong
Kong, as there is more liquidity on the mainland,” said
Ji.
China
Shipping will beat its profit forecast after raising
rates for shipments from Europe and carrying more cargo
from the US, chairman Li Shaode said on November 27.
Profit
this year will be “significantly better” than the 3.18
billion yuan previously expected, Li said in an
interview in Shanghai.
The
company will earn 2.63 billion yuan, according to the
average of nine analyst estimates compiled by Bloomberg.
The
company will receive all of parent China Shipping
(Group) Co.’s container-related assets, including
terminals and logistics divisions, said Li. (Bloomberg) |
