Ningbo port plans $1.9 bln Shanghai IPO
Ningbo Port Co plans to raise about $1.9 billion in mainland China's second-largest IPO this year, braving a Chinese market already staggering from a slew of large fundraisings and Beijing's tightening measures.
Analysts say Ningbo Port, which competes with bigger rival Shanghai International Port (Group) Co , could also face headwinds due to waning investor enthusiasm for transport stocks and the uncertainty of the global economic recovery.
"It's a pretty mature market where growth potential is relatively limited. Business prospects are also clouded by the euro crisis, which may hurt exports," said Yu Jianjun, analyst at Huatai Securities Co.
Ningbo's IPO announcement comes as mainland firms, including China's biggest lenders rush to raise cash from the stock market.
Bank of China starts selling 40 billion yuan in convertible bonds this week, and smaller rival Bank of Communications nears a rights issue plan to raise up to 42 billion yuan in Shanghai and Hong Kong.
More Chinese banks are expected to push ahead with their fundraising plans this year to boost their coffers after a lending spree last year.
The Shanghai market .SSEC has already seen 331 billion yuan worth of fundraising so far this year, close to the 352 billion yuan raised by Chinese companies through IPOs or additional share sales for all of 2008. It has dropped nearly 20 percent since mid April.
But Ningbo is unlikely to hold back from its IPO plans.
"Ningbo Port has been waiting for an IPO for ages, so I think it will still go ahead with the capital raising, although it may have to compromise on its offer price amid weak market conditions," Yu said.
Zhang Qiusheng of Galaxy Securities Co said the local government of China's eastern province of Zhejiang, where Ningbo Port is located, are also keen for an IPO soon.
The government, a shareholder in the port, desperately needs money to build new ports to gain market share, he said.
HONG KONG EYED
Ningbo Port plans to issue 2.5 billion A shares denominated in yuan CNY=CFXS, or 18.8 percent of its expanded share capital, for a listing on the Shanghai Stock Exchange, it said in a draft prospectus for the A-share initial public offering (IPO).
Its Shanghai share offer will fall just below the $2.3 billion IPO by Huatai Securities (601688.SS) launched in February but lag far behind a $30 billion IPO planned by Agricultural Bank of China in China and Hong Kong in the near term.
Ningbo Port also aims to issue 2.35 billion Hong Kong-listed H shares, although it has yet to work out the details, it said.
"H-share issue should bear a price no less than that for A shares, although final pricing will depend on market conditions," Ningbo Port said, adding it has appointed China International Capital Corp (CICC) as the Shanghai IPO's lead underwriter.
Proceeds from the Shanghai IPO would be mainly used to develop port projects but also to buy port-related machinery and supplement working capital, it said in the prospectus published late on Monday on the Chinese stock regulator's website, www.csrc.gov.cn.
The regulator, the China Securities Regulatory Commission, would review Ningbo Port's Shanghai IPO application on Friday, it said in a statement.
Ningbo Port, one of the busiest in China, chiefly handles containers, iron ore and crude transportation as well as logistics.
China's benchmark Shanghai Composite Index ended down 2.4 percent on Monday at 2,592.1 points, continuing a downtrend since mid-April that has been fueled by concerns over further tightening policies from Beijing for the real estate sector.
Analysts say Ningbo Port, which competes with bigger rival Shanghai International Port (Group) Co , could also face headwinds due to waning investor enthusiasm for transport stocks and the uncertainty of the global economic recovery.
"It's a pretty mature market where growth potential is relatively limited. Business prospects are also clouded by the euro crisis, which may hurt exports," said Yu Jianjun, analyst at Huatai Securities Co.
Ningbo's IPO announcement comes as mainland firms, including China's biggest lenders rush to raise cash from the stock market.
Bank of China starts selling 40 billion yuan in convertible bonds this week, and smaller rival Bank of Communications nears a rights issue plan to raise up to 42 billion yuan in Shanghai and Hong Kong.
More Chinese banks are expected to push ahead with their fundraising plans this year to boost their coffers after a lending spree last year.
The Shanghai market .SSEC has already seen 331 billion yuan worth of fundraising so far this year, close to the 352 billion yuan raised by Chinese companies through IPOs or additional share sales for all of 2008. It has dropped nearly 20 percent since mid April.
But Ningbo is unlikely to hold back from its IPO plans.
"Ningbo Port has been waiting for an IPO for ages, so I think it will still go ahead with the capital raising, although it may have to compromise on its offer price amid weak market conditions," Yu said.
Zhang Qiusheng of Galaxy Securities Co said the local government of China's eastern province of Zhejiang, where Ningbo Port is located, are also keen for an IPO soon.
The government, a shareholder in the port, desperately needs money to build new ports to gain market share, he said.
HONG KONG EYED
Ningbo Port plans to issue 2.5 billion A shares denominated in yuan CNY=CFXS, or 18.8 percent of its expanded share capital, for a listing on the Shanghai Stock Exchange, it said in a draft prospectus for the A-share initial public offering (IPO).
Its Shanghai share offer will fall just below the $2.3 billion IPO by Huatai Securities (601688.SS) launched in February but lag far behind a $30 billion IPO planned by Agricultural Bank of China in China and Hong Kong in the near term.
Ningbo Port also aims to issue 2.35 billion Hong Kong-listed H shares, although it has yet to work out the details, it said.
"H-share issue should bear a price no less than that for A shares, although final pricing will depend on market conditions," Ningbo Port said, adding it has appointed China International Capital Corp (CICC) as the Shanghai IPO's lead underwriter.
Proceeds from the Shanghai IPO would be mainly used to develop port projects but also to buy port-related machinery and supplement working capital, it said in the prospectus published late on Monday on the Chinese stock regulator's website, www.csrc.gov.cn.
The regulator, the China Securities Regulatory Commission, would review Ningbo Port's Shanghai IPO application on Friday, it said in a statement.
Ningbo Port, one of the busiest in China, chiefly handles containers, iron ore and crude transportation as well as logistics.
China's benchmark Shanghai Composite Index ended down 2.4 percent on Monday at 2,592.1 points, continuing a downtrend since mid-April that has been fueled by concerns over further tightening policies from Beijing for the real estate sector.