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Molybdenum a hit in HK
By Hui Ching-hoo (China Daily)
Updated: 2007-04-27 09:03 Shares of China Molybdenum surged 60 percent on its trading debut in Hong Kong yesterday, making it one of the largest first-day gainers of the year. The stellar gain of the mainland's largest producer of steel hardener bodes well for mainland companies that are going to list in the coming days. The share got off to a roaring start with an opening bid of HK$11.28, thus increasing by HK$4.48, or 66 percent over the initial public offering price of HK$6.8. The rally revived in the afternoon session and the price finally settled at HK$10.82. A total of 694 million shares changed hands, involving HK$7.44 billion. The company has listed in Hong Kong by selling 1.083 billion new shares. The retail tranche of the company's IPO, or the shares earmarked for individual investors, was snapped up. They were 398 times oversubscribed and yielded HK$294 billion. That made the IPO the third-most popular after the mainland's largest bank, the Industrial and Commercial Bank of China, and property developer Country Garden. Prudential Brokerage Associated Director Kingston Lin said the surge in Molybdenum's share price is in line with market expectations. "We believe the share still has momentum to pick up in the short run." Duan Yuxian, chairman of China Molybdenum, said he is satisfied with the performance on the first trading day. He is confident of the company's outlook in view of the possible rise in molybdenum price. Duan said the company has no plans to go public in the A-share market right away. He added that the scalability of the company enabled it to withstand the impact of the cool-down measures initiated by the government. The company plans to seek acquisition of non-ferrous metals, platinum and zinc producers in Luoyang. "We hope to finalize some of the acquisitions by the end of the year," Duan said. The listing prospectus states that the company will use 40 percent of the listing proceeds to increase its capacity. Some HK$2.4 billion of the proceeds will be used as the war chest for future acquisitions. China Molybdenum reaped 1.52 billion yuan in net profit last year, a 31 percent increase over the previous year. Duan pins high hopes on the full-year earnings in 2007 in light of the undersupply of molybdenum. (For more biz stories, please visit Industries)
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