Tiangong debuts with 82pc gain

PUBLISHED : Friday, 27 July, 2007, 12:00am
UPDATED : Friday, 27 July, 2007, 12:00am

Tiangong International, the largest high-speed steel manufacturer on the mainland, posted a rise of 82 per cent on its first day of trading yesterday in the second-best performance by a market debutant this year.

The stock surged as much as 90.25 per cent in the first 10 minutes to hit a peak of HK$12.10. It later fell back to end at HK$11.56, well above its offer price of HK$6.36. Some HK$1.2 billion worth of stock changed hands.

Only China High-Speed Transmission Equipment Group, which gained 97.74 per cent on its US$272 million initial public offering, has put in a better first-day performance.

'We are happy with this excellent performance,' said chairman Zhu Xiaokun during the trading ceremony yesterday.

'This shows the market is responding positively on our business outlook.'

For each board lot of 1,000 shares allotted in the initial public offering, Tiangong International shareholders could have made as much as HK$5,740 if they sold it at the peak price yesterday. The retail tranche was 668.5 times oversubscribed.

BNP Paribas was the sponsor of the offering.

The company raised HK$574.9 million via the global offering after pricing the shares at the top end of the indicative price range. The funds will be used to upgrade the company's production facilities and pay off debt.

The company produces high-speed steel that can be made into cutting and drilling tools or used in vehicles, railways and aircraft production.