China Railway Construction Corp. (CRCC), the country's leading rail builder, has raised 22.25 billion yuan (3.1 billion U.S. dollars) in its Shanghai IPO with demand for shares at 140 times the offering.
In a statement to the Shanghai Stock Exchange late on Wednesday, the state-owned company said the 2.45 billion A shares were priced at 9.08 yuan, the top of the price range.
The price to earnings ratio was 30.56, according to the statement.
The share issue was oversubscribed as investors rushed to the primary market for safe returns when the secondary market remained weak. The key Shanghai Composite Index has dropped about 30 percent from its record high in mid October last year.
The offering has attracted 3.12 trillion yuan (437.5 billion U.S. dollars) in subscriptions, including 345.87 billion yuan from off-line orders and 2.78 billion yuan from on-line orders. The value of the orders is the country's third-largest after the 3.38 trillion yuan of rival China Railway and PetroChina's 3.3 trillion yuan.
A total 490 million shares, or 20 percent, were sold off-line to institutions. The remaining 1.96 billion shares were sold on-line to both institutional and individual buyers after implementing a clawback mechanism, it said.
The rail builder has earlier cut the number of A shares it offered to 2.45 billion from 2.8 billion after reconsidering its capital demand.
The offering represented 23.44 percent of CRCC's outstanding capital. The firm also planned to sell up to 1.71 billion H shares in Hong Kong.
CRCC had built nearly 34,000 kilometers of railway by the end of 2006, more than half of all the rail links built nationwide since 1949.
It established its name by building the Qinghai-Tibet railway, Shanghai maglev rail line and the Beijing-Kowloon railway. It also took the largest share in the bidding for the construction of the Beijing-Shanghai express railway.
Its total assets amounted to 155 billion yuan (21.7 billion U.S. dollars) by the end of November 2007, with net profit reaching 2.8 billion yuan (391.8 million U.S. dollars).
(Xinhua News Agency February 28, 2008)