China Railway Group's dual listing got an enthusiastic response yesterday with investors in Hong Kong and Shanghai bidding up the offering prices to the top of their ranges.
China Railway, the world's third-largest construction contractor, will raise 22.4 billion yuan in Shanghai at the top of its indicative range by issuing 4.675 billion shares at 4.80 yuan per share. Sources said the issue, which drew 3.37 trillion yuan, was 263 times oversubscribed.
The firm is also raising HK$19.2 billion in Hong Kong by marketing 3.326 billion new H shares at between HK$5.03 and HK$5.78 each.
Chairman and executive director Shi Dahua said the firm chose a dual listing to catch the A-share market bull run and enhance its global image by listing in Hong Kong. 'Both valuations are reasonable,' he said.
Market sources yesterday said the international offering for the H shares was oversubscribed 15 times. It is expected that the railway firm's H-share offering to retail investors from today until next Wednesday will receive overwhelming orders. The stock will debut on the Shanghai exchange on December 2 and in Hong Kong on December 7.
Infrastructure construction accounts for about 88 per cent of China Railway's total revenue. The firm also engages in infrastructure surveying, design and consulting, railway-related engineering equipment, property development and mining.
