BEIJING, April 27 -- Shares of China Molybdenum
surged 60 percent on its trading debut in Hong Kong Thursday, 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 11.28 HK dollars, thus increasing by 4.48HK dollars, or 66 percent over
the initial public offering price of 6.8HK dollars. The rally revived in the
afternoon session and the price finally settled at 10.82HK dollars.
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 294 billion HK dollars.
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
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 2.4
billion HK dollars of the proceeds will be used as the war chest for future
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
(Source: China Daily)