Mainland companies in quest for HK listing
Two companies, both from the mainland, have filed preliminary prospectuses with the Hong Kong stock exchange to raise funds despite the weak market sentiment.
In addition to mining iron and copper, Wanguo International Mining, processes ore and sells metal concentrates. It plans to raise up to HK$315 million, according people familiar with the matter.
The Jiangxi-based miner had a mining capacity of 300,000 tonnes per annum [tpa], and a processing capacity of 400,000 tpa as of the end of last year.
Wanguo said in its prospectus that it planned to expand its facilities, which, when completed, 'are expected to have both a mining capacity and processing capacity of 600,000 tpa from 2014'.
The company said it would focus on the production of copper concentrates and iron concentrates, and that the reserves at the Xinzhuang mine, which it owns, were estimated to be sufficient for producing 600,000 tpa for 31 years.
The miner's revenue amounted to 297 million yuan (HK$342 million) last year, compared with 86.5 million yuan in 2009. Net profit last year was 73.3 million yuan, surging from 10.6 million in 2009.
Wanguo will issue 150 million shares at a price range of HK$1.75 to HK$2.1, according to market sources.
The firm reported that its revenue increased 11.6 per cent year on year in the first quarter of this year to 70.4 million yuan as sales grew, but the average selling price of its metal concentrates fell by 13 to 23 per cent during the period.
Wanguo said it would try to maintain the same level of revenue as last year, given 'the current market situation and our current production level'. But the company treaded cautiously on dividends, saying it intends to retain most, 'if not all', of its income to operate and expand the business.
The other company, mainland cigarette packaging material manufacturer Sheen Tai Holdings is seeking to raise funds to improve its market position in Jiangsu province, according to the company's prospectus filed with the exchange.
It is the No 2 player in the province's cigarette packaging materials market, according to Euromonitor.
Sheen Tai reported a revenue of 675 million yuan for the last year, up from 264.5 million yuan in 2009.
Profit rose to 140.8 million yuan, more than double from 64 million yuan two years earlier.
Gross profit margin stayed stable at about 36.5 per cent during the period.