Container hire firm in HK$1.5b offering
China Shipping Nauticgreen, a container leasing arm of China Shipping Group, is to raise as much as HK$1.5 billion in an initial public offering in Hong Kong.
As one of the top 10 container leasing companies in the world, Nauticgreen owns and manages 283,538 containers, representing 456,416 20ft equivalent units (TEUs).
The company expects to purchase 96,000 TEUs of containers in the year for US$260 million and intends to expand its fleet by 14 per cent to 520,000 TEUs by the end of 2011, followed by 1 million TEUs by 2015.
Nearly half of the container-leasing revenue last year came from its sister company - China Shipping Container Lines (CSCL) - the second-largest liner firm on the mainland, which is controlled by Nauticgreen's parent, China Shipping Group.
CSCL was the only leasing customer of the company when it started operations in 1997. The percentage of container-leasing sales from CSCL topped 80 per cent in 2009 but declined to 24.6 per cent in the first three months of this year, underscoring the efforts of the company to diversify its client base. CSCL, however, remains the largest container-leasing customer of Nauticgreen.
Nauticgreen's major container suppliers are also associated companies. The firm purchased containers from Dong Fang (Guangzhou), Dong Fang (Jinzhou) and Dong Fang (Lianyungang), all controlled by China Shipping Group.
The Dong Fang companies will respectively sell 48,000 TEUs, 57,750 TEUs and 61,250 TEUs containers to Nauticgreen in the next three years, about 35 per cent to 40 per cent of the new containers to be bought by Nauticgreen.
All its suppliers are Chinese container manufacturers, including China International Marine Containers, Singamas Container Holdings, and CXIC Group Containers.
The container-leasing business was severely hit in 2009 due to the sharp decline in world trade and seaborne transportation after the global economic crisis.
The business started to rebound in 2010 as international trade gradually recovered.
Nauticgreen's net profit in 2010 jumped to US$37.2 million from US$19.5 million in 2009. Sales jumped 48 per cent to US$79.7 million.
China Shipping Group will indirectly own 70 per cent of the enlarged issued share capital of Nauticgreen after the IPO. Some 600 million shares are on offer at between HK$1.56 and HK$2.50 apiece.