Cosco Shipping Shares Surge 76% in Shanghai Debut (Update2)
By Janet Ong
quote.bloomberg.com
Shanghai, April 18 (Bloomberg) -- Shares in Cosco Shipping Co., a unit of China's No. 1 shipping company, rose by as much as 76 percent from their initial offer price when the stock began trading in Shanghai.
Cosco's Class A shares, which only local investors can buy, rose as high as 12.98 yuan from 7.39 yuan, after a sale in which subscribers sought 549 times more shares than stock available. The stock is trading at about 33 times its 2001 earnings, according to its latest financial report.
``It's still cheap compared to other A shares in Shanghai, which are trading at an average of 43 times 2001 earnings,'' said Zhang Qi, an analyst at Haitong Securities Co.
The unit of state-owned China Ocean Shipping (Group) Co. needs money as it expands to compete against foreign and local rivals under World Trade Organization guidelines opening the nation's markets wider. It plans to use the proceeds and bank borrowings of as much as 640 million yuan to buy 13 ships, increasing its fleet to 38.
Guangzhou-based Cosco, which ships heavy trucks, equipment for nuclear-power stations, and oil drilling platforms forecasts sales will reach $100 million a year within three years. It reported sales of $64 million for 2001.
Expanding Trade
The growth in China's shipping business is likely to accelerate as trade in Asia's second-largest economy expands under the WTO. China shipped 600 million tons of imports and exports last year, according to the government's deputy shipping administrator, Xu Guang. He didn't give comparable figures for 2000. |
