Sinotrans Shipping Ltd. is seeking to raise as much as US$1.47 billion in an initial public offering ahead of a Hong Kong listing later this month, a person familiar with the situation said.
The unit of freight-forwarding-services provider Sinotrans Group Corp. of China is selling 1.4 billion shares, or 35% of its enlarged share capital, in an indicative range of 7.18 Hong Kong dollars to HK$8.18 (93 U.S. cents to $1.05) each, the person said.
Sinotrans Shipping, the third-largest Chinese dry-bulk shipper by capacity after China Cosco Holdings Co. and China Shipping Development Co., has an option to increase the IPO by 15% to raise a maximum US$1.69 billion, the person said.
The indicative share-price range translates to 12 to 14 times forecast 2008 earnings of US$300 million, analysts said.
That price/earnings ratio is lower than China Cosco Holdings' forecast 2008 P/E ratio of 22.7 and China Shipping Development's 18.3, according to Thomson Financial.
The IPO's valuation range is below the 17.6 times that analysts said Sinotrans Shipping could fetch given its fleet-expansion plans.
Sinotrans Shipping has 26 dry-bulk carriers, three single-hulled crude carriers and five container vessels. It will use the proceeds of the IPO to enlarge its fleet size, acquire shipping companies, repay bank loans and replenish its working capital.
Analysts said the company plans to increase its dry-bulk fleet capacity 14% by 2009, while its oil- and container-shipping capacity will rise 37% this year.
The company's 2006 net profit fell 31% from a year earlier to US$119 million amid fluctuations in freight rates and charter-hire rates, its preliminary listing prospectus said.
Net profit is likely to rise at least 6% to US$126 million this year, the company said.
Bookbuilding for the IPO started yesterday and pricing is expected Nov. 17, the person said. The company is scheduled to list on the Hong Kong stock exchange Nov. 23.
Seven cornerstone investors have subscribed to a total of US$175 million in shares.
BOC International Holdings Ltd. and UBS AG are bookrunners on the deal, the person added.
The unit of freight-forwarding-services provider Sinotrans Group Corp. of China is selling 1.4 billion shares, or 35% of its enlarged share capital, in an indicative range of 7.18 Hong Kong dollars to HK$8.18 (93 U.S. cents to $1.05) each, the person said.
Sinotrans Shipping, the third-largest Chinese dry-bulk shipper by capacity after China Cosco Holdings Co. and China Shipping Development Co., has an option to increase the IPO by 15% to raise a maximum US$1.69 billion, the person said.
The indicative share-price range translates to 12 to 14 times forecast 2008 earnings of US$300 million, analysts said.
That price/earnings ratio is lower than China Cosco Holdings' forecast 2008 P/E ratio of 22.7 and China Shipping Development's 18.3, according to Thomson Financial.
The IPO's valuation range is below the 17.6 times that analysts said Sinotrans Shipping could fetch given its fleet-expansion plans.
Sinotrans Shipping has 26 dry-bulk carriers, three single-hulled crude carriers and five container vessels. It will use the proceeds of the IPO to enlarge its fleet size, acquire shipping companies, repay bank loans and replenish its working capital.
Analysts said the company plans to increase its dry-bulk fleet capacity 14% by 2009, while its oil- and container-shipping capacity will rise 37% this year.
The company's 2006 net profit fell 31% from a year earlier to US$119 million amid fluctuations in freight rates and charter-hire rates, its preliminary listing prospectus said.
Net profit is likely to rise at least 6% to US$126 million this year, the company said.
Bookbuilding for the IPO started yesterday and pricing is expected Nov. 17, the person said. The company is scheduled to list on the Hong Kong stock exchange Nov. 23.
Seven cornerstone investors have subscribed to a total of US$175 million in shares.
BOC International Holdings Ltd. and UBS AG are bookrunners on the deal, the person added.