Daqin railway to list shares on Shanghai Stock Exchange after huge IPO
14/7/2006 17:10
The first Chinese railway company to list domestic A shares, Daqing
Railway Co, plans to debut on the Shanghai Stock Exchange early next month after
a huge initial public offering (IPO) of over 14 billion yuan (US$1.75
billion).
The Daqing Railway Co said on Thursday that its IPO will not exceed
15 billion yuan (US$1.875 billion) and its equities on A shares will be no more
than five billion shares.
Daqin's IPO will be the second largest in China's A
shares since China resumed IPO last month following a year-long suspension. It
is the second only to the Bank of China which made a strong debut in Shanghai on
July 5 with the issue of about six billion A-shares for an IPO worth around 20
billion yuan (US$2.5 billion).
The Daqin Railway Co operates the major coal
transportation railway line in northern China. The 1,000-km line links Datong,
Shanxi Province, north China, and the port city of Qinhuangdao in Hebei
Province, which is expected to handle 250 million tons of coal this year.
Luo
Renjian, a researcher with the Institute of Comprehensive Transportation under
the National Development and Reform Commission (NDRC), told Xinhua that the
listing of Daqin marks a new leap in the reform of the railway investment system
in China.
Luo believes more railway companies will follow the Daqin model by
listing on the stock market to raise capital for railway construction.
Zhang
Jianping, deputy director of the Development Planning Department under the
Ministry of Railways, recently confirmed that the ministry will speed up the
listings of some large and profitable railway companies.
The overseas-listed
Guangshen Railway Co, Ltd is preparing to follow Daqin to list in China's A
shares. In 1996, the company became China's first railway company to list in
Hong Kong and New York.
China's major railway freight company, China Railway
Container Transport Co, also plans to list by purchasing a listed
railway-related company, Dalian Tielong Industry Company Co, Ltd
Sources said
the 100-year-old Jiaoji Railway that runs between Qingdao and Ji'nan city in
east China's Shandong Province is also preparing to list overseas.
Luo said
the listing of some profitable companies with transparent capital will be an
important channel for the ministry of railways to explore investment resources
in the future.
By the end of 2005, China had established 20 joint-venture
railway companies, attracting investment of over 44 billion yuan (US$5.5
billion), including 2.5 billion yuan from private investors. The money has been
used for the construction of 20 railway projects like coal railways and express
railways solely for passenger trains.
According to China's middle and
long-term plan of railway development, by the year 2020, China will extend its
total railway length from the current 74,000 to 100,000 km, which will need an
total investment of 2,000 billion yuan (US$250 billion).
Xinhua
|
