Zhongxing, one of China's biggest manufacturers of telecommunications equipment, has postponed plans for a public listing in Hong Kong and is considering instead an overseas private placement, an official newspaper reported yesterday. At a shareholders' meeting last August, Zhongxing, based in the eastern city of Hangzhou, announced plans to issue H shares of not more than 30 per cent of its total capital. The company said it wanted to raise at least US$450 million with a listing in the final quarter of last year or the first half of this year. In recent years, Zhongxing has rapidly increased exports of its equipment, particularly to developing countries. It wanted to use the listing to raise foreign exchange, increase its international profile and build up its brand. But management decided to postpone such plans, according to the 21st Century Business Herald, because of the weak market and the low valuations currently given to telecom companies. It is instead looking at an overseas private share placement. The appeal of this is that it is cheaper than a public offering - with less strenuous disclosure requirements - and requires a lower level of regulatory approvals. It would also enable Zhongxing to attract the kind of strategic and industry investors it prefers.
