Top Biz News
CNR to issue 3b A shares in Shanghai IPO
By Li Xiang (China Daily)
Updated: 2009-12-11 07:56
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China CNR Corporation Ltd (CNR), the country's top train maker by market share, said yesterday that it planned to issue up to 3 billion A shares in an initial public offering (IPO) in Shanghai to raise 6.44 billion yuan for investment projects.
The Beijing-based company said it would begin taking subscriptions from institutional investors on Dec 18 and from retail investors on Dec 21. The trading debut of its shares in Shanghai would be no later than Dec 29.
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CNR planned to invest a total of 10.04 billion yuan in technology upgrade and innovation for high-speed train manufacturing, of which 6.44 billion yuan would be raised from the Shanghai IPO.
Analysts said CNR's large-volume share offering on the Shanghai bourse would have limited impact on the market.
"I don't think CNR's offering would burden the market with a downward pressure. The uptrend supported by good economic fundamentals is not going to be easily changed," said Zhang Qi, an analyst at Nanjing Securities.
But Zhang pointed out the increase in the new share supply did indicate the Chinese regulator's intention to cool off the high-value stock market and enhanced investors' fears over potential asset bubbles.
In recent weeks, China's securities regulator has picked up the pace of new large share offerings to allow companies to access funds through IPOs while the government wants private investment to take over government stimulus as the main growth driver and put the brakes on the massive lending spree that has raised concerns about bad loans.
China Shipbuilding Industry Co, the country's largest ship equipment maker and another heavyweight IPO candidate this year, plans to sell up to nearly 2 billion shares to raise 6.44 billion yuan.
CNR and its rival China South Locomotive and Rolling Corporation are the two major train manufacturers in China, accounting for more than 95 percent market share in the country. In 2008, CNR's net profit surged 40 percent year-on-year to 1.27 billion yuan and its sales jumped 31 percent to 34.7 billion yuan.
