PICC's debut success kicks China Silver and CIMC into action
China Silver aims to raise HK$187 million from share offer by year-end while CIMC hopes to switch to H-share market through introduction
Two companies, one a silver processor and the other a manufacturer of shipping containers, aim to list in Hong Kong by the end of the year, joining the fresh wave of initial public offerings in the wake of People's Insurance Company of China's stellar trading debut.
"The company is expected to generate a net profit of 152 million yuan [HK$188.23 million] this year, up more than 30 per cent from 2011," said one of the people, who added the deal had been well covered by a number of long-term institutional investors despite a lack of support by cornerstone investors.
China Silver plans to use the proceeds to fund capacity expansion and bankroll possible upstream acquisitions such as silver mines.
Chen Wantian, China Silver's chairman and chief executive, said the company "adopts a compact production model to hedge against the price volatility of silver", pointing out that its average turnover of inventory has fallen to 48 days in the first half of this year from 85 in 2010.
It plans to increase silver production to 400 tonnes by next year and 550 tonnes in 2014 from 250 tonnes this year.