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Dalian port’s expectation for Shanghai listing

October 22nd, 2009

daliangang The China’s third largest port operator, Dalian Port Co Ltd expects to complete its initial public offering on the Shanghai Stock Exchange within the first half of 2010, Sun Hong, the Chairman of Dalian Port Co Ltd said.

The company was listed in Hong Kong in 2006 which means it will become China’s first port with a dual listing.

And also the Dalian Port is the biggest port operator in Bohai Bay which is located in the northeastern China; it focuses on container and crude oil.

The company said this month that it will issue no more than 1.2 billion A shares in Shanghai and no more than 1.2 billion shares to its parent (Dalian Port Co Ltd), expecting to raise a total of 2.8 billion yuan.

Currently the company is holding 3 billion shares and the holding of its parent will be reduced from 60 percent to 55 percent after the share issue.

The executive director of Dalian Port, Zhang Fengge said that assume 3.67 yuan per share as the offering price, and the asset acquisition earned 14 million yuan this year, the dilution effect to H shares may be offset and the earning per share will increaser 0.7 percent.

Funds raised earnings will be used for the construction of dock infrastructure and bulk cargo dock facilities, as well as bank repayment.

Sun also said that the port would increase capital expenditure next year to 3 billion yuan after an asset acquisition from its parent Dalian Port Co Ltd, up from 2 billion yuan this year. And after that asset acquisition, it would enjoy a big market share. And the net profit may rise to 140 million yuan.

Dalian Port accomplished throughput of 185 million tons, an 11.9-percent rise on the previous year, and an 18.1-percent rise in containers to 4.5 million 20-foot equivalent units (TEUs). More than 90 percent of trade containers in northeastern China move through the port to go abroad.

The port aims to boost throughput by 10percent next year from this year’s expected throughput. Its passenger roll-on, roll-off terminal experienced a 50-percent rise on both throughput and revenue in the first half year of 2009.

China port operators have been reporting gradually improving volumes after the deepest slump in global trade because of the economic slowdown.

There is still growth in cargo volumes last month compare to the year earlier, posted by China’s Yangtze River Delta. Cargo throughput at Shanghai rose 5.8 percent year on year to 33.28 million tons last month, according to Shanghai International Port Group (SIPG).

The Baltic Dry Index reached a seven-month high point this week, boosting optimism for port business in the fourth quarter and early next year.

Qingdao, another high rated port, is also gearing up for its IPO as the seventh largest port worldwide and first container transfer port in China.

Tian Guangwen, the vice-president of Qingdao port said that they have been preparing for year, he said that they ran for H shares at first but this year they restarted the application for A share listing and wish to go to the market as a whole.

He also said that it is good news for Dalian. Their IPO will not be for capital raising but for better development.


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