Sinotruk (Hong Kong) Ltd, China's largest maker of heavy trucks,
raised HK$9 billion (US$1.2 billion) in a Hong Kong initial public
offering, said two people involved in the sale.
Sinotruk sold 702 million new shares at HK$12.88 each, the top
of the range marketed to investors, said the people, declining to
be identified before an official statement. The sale of a
32-percent stake values the company, based in Ji'nan, Shandong
Province, at US$3.6 billion, or 18.8 times next year's profit as
estimated by the banks handling the sale, they said, according to
Bloomberg News.
The maker of Sitaier and Gold Prince trucks will use the funds
raised to build new plants and improve technology as a construction
boom boosts commercial vehicle sales in China. Heavy-truck sales
rose 65 percent in the first 10 months of the year, according to
Wang Mingcun, an analyst at TX Investment Consulting Co in
Beijing.
"China's economic growth and fixed-asset investments have
boosted heavy-truck sales," she said. Investors will also be
attracted to Sinotruk because "there isn't much choice for
heavy-truck stocks," she added.
Heavy-truck sales in China may rise 20 percent next year, Wang
said. Sinotruk will also benefit from ownership of the group's
profitable engine plant, she added.
Hong Kong individuals sought more than 300 times the number of
stock initially set aside for them, said the people. Demand from
international institutions was about 50 times the shares still
available to them, one of the people said.
The firm reserved US$200 million of stock for eight corporate
investors, including Bank of China Investments Ltd, the investment
arm of the nation's second-biggest bank, and the Government of
Singapore Investment Corp, people familiar with the sale said
earlier this month.
Sinotruk's stock is slated to begin trading on the Hong Kong
Stock Exchange on Wednesday.
(Shanghai Daily November 22, 2007)
