Unfazed mainland firms plan IPOs in HK
Three mainland companies have signalled their intention to tap the Hong Kong stock market for funds through initial public offerings of shares, despite the volatile climate.
Polymetallic mining company Wanguo International Mining Group plans to raise up to HK$315 million through an IPO to fund expansion aimed at increasing both its mining and ore-processing capacity to reach 600,000 tonnes a year in 2014.
The Jiangxi-based firm, which has a single operation focused on mining, ore processing and sales of concentrates of copper and iron, has a mining capacity of 300,000 tonnes a year and an annual processing capacity of 400,000 tonnes.
'We will grow production at our mine, and will also expand our mineral resources and ore reserves through the acquisition of new mines,' said Gao Mingqing, the company's chairman and chief executive.
The miner plans to pump 75 per cent of the IPO proceeds into expanding production capacity.
'Increasing production capacity is the job we will focus on at the moment,' Gao said. He said the company was in talks to acquire new projects but he declined to elaborate.
The rest of the proceeds will be invested in exploring reserves in areas surrounding its mine, upgrading technology and funding the company's operations.
Wanguo will offer 150 million shares priced between HK$1.75 and HK$2.10 a share. The public offering in Hong Kong will open today, with trading expected to begin on July 10.
Inner Mongolia Yitai Coal also plans to raise up to about HK$8.6 billion from an IPO in Hong Kong, the company announced. The firm buys, mines, distributes and sells coal and coal-processed products on the mainland. It also has interests in pharmaceuticals and real estate.
The company expects net profit of at least 3.1 billion yuan (HK$3.8 billion) for the first half of this year. It plans to issue 163.7 million shares at a price range of between HK$43 and HK$53 each.
Yitai Coal intends to use 27 per cent of the IPO proceeds to improve its transport system, while 24 per cent will be spent on building coal mines. The rest of the money will be used to repay bank loans and expand production capacity.
The company has secured seven cornerstone investors that together will buy HK$3.04 billion of Yitai's offered shares. They include Datang International Power Generation, Baosteel and Mongolia-based investment firm Vanzip Investment.
Separately, mainland fabric manufacturer and designer Silverman has filed a listing prospectus with the Hong Kong exchange. Headquartered in Shandong province, Silverman's products are widely used in bed linen and garments. Its revenue reached 928 million yuan last year, compared with 774 million yuan in 2010 and 530 million yuan in 2009, according to the prospectus.