China Shipbuilding Industry Corp (CSIC), one of the nation's
leading shipbuilding groups, will seek an initial public offering
(IPO) in 2007, according to sources close to the State-owned Assets
Supervision and Administration Commission (SASAC).
Headquartered in Beijing, CSIC is reportedly planning a new
issue of around 1.6 billion A shares to raise between 6 and 7
billion yuan, the sources said.
CSIC is undertaking a major restructuring effort to merge its 16
subsidiaries in August to form a more integrated company, to be
called China Shipbuilding Industry Co Ltd, before it applies for an
IPO on the Shanghai Stock Exchange in December, said the
source.
SASAC, the highest authority on China's most valuable State
assets, has already given a green light to the listing plan, a
government source, who declined to be named, told China Daily.
"Once the 16 companies are integrated under one umbrella, they
will be members of the CSIC as a group company with around 4
billion yuan in registered capital," the source said.
Chen Yicong, an analyst with Southwest Securities, said "some
people thought CSIC would go public by injecting its assets into
its listed subsidiary Fengfan Co Ltd, but the reality will probably
be different".
Chen said that now is the best time for a group-wide IPO for
CSIC "considering the general quality of its assets and the
country's target of becoming a more important shipbuilding center
in the world".
Total assets of the restructured CSIC would be valued at more
than 130 billion yuan. In 2006 its consolidated revenue was 60
billion yuan and its net profit 2.5 billion yuan, sources said.
Established in 1999, CSIC owns some of the nation's biggest
shipyards and ship engine manufacturers. It also builds ships for
the Chinese navy.
The company is also reportedly developing a large shipyard in
Dalian, a port city in Northeast China's Liaoning Province.
As China bids to become the world's largest shipbuilder by 2010,
CSIC plans to enlarge its annual shipbuilding capacity to 10
million deadweight tons and generate a total revenue of 120 billion
yuan.
The company now claims to have one-third of the nation's
shipbuilding capacity and 6 percent of global capacity.
China is already the world's third-largest ship exporter after
South Korea and Japan.
Last year South Korea accounted for 35 percent of worldwide
output, while Japan produced 25 percent and China accounted for 19
percent.
(China Daily July 12, 2007)
