Dismal debut for Tianjin Bohai

SHARES of Tianjin Bohai Chemical tumbled 8.3 per cent yesterday in their trading debut, highlighting that the heydays of H share companies have passed.

As the eighth mainland state-owned enterprise listed in Hong Kong, Bohai is the first H share counter to fall below its issue price in maiden trading, in a market reigned by jitters about China's inflamed economy.

The counter ended a brisk session at $1.10, 10 cents down from its offering price of $1.20, just off from the intraday low of $1.08. It nudged the day's high of $1.3 in opening minutes, but fell throughout the session.

Bohai was the second most active in volume, with a total of 69.03 million shares changing hands.

The company's initial share offering of $408 million was barely subscribed two weeks ago, which foretold a disappointing performance on the first day of trading.

''It's just unlucky timing for them,'' said Sun Hung Kai Securities analyst Larry Jiong, pointing to the mounting concerns of triangular debts which had cut into Bohai's net profit for the past three years.

''People are concerned of the bad debts and their perception is that the company's technology is not that advanced,'' he said.

Analysts usually draw comparisons between Bohai and Shanghai Chlor Alkali, a chemical maker listed in Shanghai, which is seen as more competitive.

Mr Jiong said Bohai was a long-term play, with its dominating position in the marine chemical industry, rather than a bet for short-term gains by punters.

''As the largest marine chemicals maker in China, its market share will be even greater over several years,'' he said.

''In probably ten or 15 years, all Chinese industries will go through consolidation and Bohai would become one of the big conglomerates.'' The price performance of Bohai was a far cry from what happened six months ago when shares of Maanshan Iron and Steel soared more than 60 per cent in its trading debut.

Analysts said investors were still interested in quality H share counters, but were holding a more realistic view of buying the stocks.

Bohai's deputy chairman Cai Chaoqun blamed the lukewarm response of the company's new issue to the fact that investors were not familiar with the chemicals industry.

He admitted that the company's profit margin was lower than most light industries, but stressed that the stock was more for long-term investment because of its market position in the basic raw materials industry.

''If you look at the company in a ten or even 20-year time span, our profit will perform better than the light industries,'' said Mr Cai.

, who spoke yesterday after officiating for the listing ceremony.

He said the company had shown signs that the problem of triangular debts was easing in the first quarter, despite a credit squeeze during the period.

He said its sales rose 27 per cent in the first three months, while there was no increase in bad debt.

Mr Cai said Bohai had no plan to list its shares in the US through American Depository Receipts (ADR).