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Christine Chan

SHENZHEN Great Ocean Shipping Co's B shares fell 11.1 per cent on their debut on the Shenzhen Stock Exchange yesterday.

  The container shipping company closed at HK$1.60, down 20 HK cents from its issue price with about 211,000 shares traded.

  The turnover represented only 0.35 per cent of the company's 60 million issued B shares.

  Shenzhen's B-share index rose 0.11 per cent yesterday.

  Peregrine Brokerage China sales director Samson Chau said investors had been staying away from the depressed B-share market.

  The official Shenzhen B index is down 22 per cent from its high in October and 30.3 per cent weaker since the beginning of the year.

  'Great Ocean didn't appeal to institutional investors, with most buyers today being retail investors,' Mr Chau said.

  Another broker said the company had failed to perform on its debut because of the listless market, with fund managers away for the Christmas holidays.

  The company raised $108 million by issuing 60 million B shares at $1.80 each.

  The shares are at a fully diluted price-earnings multiple of 5.7 times and the company has forecast a prospective dividend yield of 9.6 per cent.

  The company will use US$10 million of the proceeds to repay a loan from Hongkong Bank used to buy two new ships delivered in January and March.

   Another US$3 million will go towards a US$7.5 million down payment on two ships to be commissioned from South Korea. They were to be completed by the end of next year.

  The remaining US$4.5 million of the deposit on the two 642 teu (20-foot equivalent units) vessels, expected to cost US$15 million each, was to be raised by mortgaging one of the recently delivered vessels built under the last loan.

  Great Ocean's majority shareholder is Shenzhen Shekou Great Ocean Shipping Co, a wholly owned subsidiary of Tianjin Shipping Group. China Merchants Securities was the lead underwriter for the issue.

   Great Ocean, set up in 1989, has seen its fleet grow from one container vessel to five vessels.

  The company operates services between Hong Kong and Tianjin, Dalian and Yantai.

   It has a 55 per cent stake in Bonami Line, which operates between Shanghai and Pusan in South Korea.

  The company expects to operate services between Tangshan and Hong Kong next month, between Tianjin and Japan in March, and between Tianjin and Pusan in May.

  Great Ocean made a net profit of 40.21 million yuan (about HK$37.39 million) last year and has forecast a profit of at least 51 million yuan this year.

  Turnover was 37 million yuan in the first three months of the year, against 151.94 million yuan for the whole of last year.



Shipping firm's B shares flop